Is Mexico’s Economy Slowing? If It Is, It’s Not for Long!

Published on: Aug 30 2013 by Thomas Lloyd

Investment in MexicoThere have been some concerns about Mexico’s economic growth – an issue I’ve been taking a very positive stance on in this blog. The stats are out there, and there’s no doubt; the first half of 2013, contrary to expectations, was not impressive. While some people are immediately skeptical, this might not be the doom and gloom that they think it is.


First of all, here’s a fairly cynical evaluation of the numbers from Forbes:


Mexico’s Finance Ministry cut its 2013 growth forecast for Mexico to 1.8%, down from its previous prediction of 3.1%. Mexico’s National Statistics Institute reported that the country’s GDP (at least when seasonally adjusted) actually contracted 0.74% during the second quarter of 2013. This is more bad news for the economy that Thomas Friedman hastily dubbed the Aztec Tiger. In the fourth quarter Mexico’s economy grew at an anemic 0.8 percent. Despite campaign promises that voters would “earn more” and the introduction of an ambitious set of reform bills, Mexico’s economy started to slow at exactly at the time that the country’s new president, Enrique Peña Nieto, took office.


(Source: Forbes)


The article continues with a very similar, negative tone; Mexico’s economic “miracle” was an illusion, or so the writer implies.


Yet, this same writer points out that President Pena Nieto’s reforms seem to be moving in a very good direction. He also points out that reforms don’t bring effects in a few weeks, or even months, but usually years down the road. As I’ve pointed out in this blog, large corporations continue to invest in this country on a large-scale.


If Mexico is really on a major slow-down, I would say it can’t last long. My advice is this: if the economy slows down here, the peso falls in value, etc., that would open some great investment opportunities in real estate and other areas. Especially if things take a temporary slow-down now, an investment could see some great return when the effects of these reforms begin to show up!


-by Thomas Lloyd


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