Mexican Economy in Sweet Spot
Mexico’s macroeconomic environment is in good shape, but reforms are required to draw further investment. The drug war weighs on GDP expansion.
After a few rough years, Mexico is poised for strong growth
without inflation. However, deteriorating security amid rising
drug-related crime may deter investors, and a lot depends on
continued US strength.
"The Mexican economy is
in a sweet spot, with output, growth and inflation all positive
for 2011," says Lupin Rahman, senior vice president of emerging
markets portfolio management at Pimco, which has over $1.3
trillion in assets under management.
The GDP growth forecast
for 2011 is 4%-5%, according to the finance ministry. A big
pick up is expected from the manufacturing sector and domestic
demand, says Alfredo Thorne, head of global markets at
However, the impact of
the security concerns as a result of the drug-related violence
in Mexico is shaving 1%-2% off the expansion rate, he adds.
"If Mexico manages to stabilize the security issue, similar
to what happened in...
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.