Political Risk Latin America Blog @PolRiskLatam

Mexico: hitting the bullseye?

Posted in News and Articles, Political Risk by politicalrisklatam on February 23, 2011

by Adam Thomson for Financial Times – Beyond Brics, February 22nd, 2011.

Could Mexico be on the verge of something special? Perhaps, but the reason is not just the news, released this week by the country’s national statistics agency, that the economy grew 5.5 per cent in 2010, the highest rate in a decade.

Behind the numbers lies a more intriguing prospect. During the last nine months or so, exports (mainly to the US) have driven the recovery, and there has been little or no sign of any pick-up in the domestic economy. But now, finally, there are signs that the Mexican consumer is also playing a part.

For several months, there had been signs that Latin America’s second-largest economy was recovering faster than economists had predicted just a year ago. And even with the impressive fourth-quarter growth results of 4.6 per cent compared with the same period in 2009, Mexico is still only just recovering what it lost in 2009, when the economy shrank by 6.5 per cent.

The surprise in the latest data was the composition of last year’s growth and, in particular, the recovery of the service sector, which expanded by 5 per cent. The figure is important because it is the clearest sign yet that recovery has finally seeped into the domestic economy. (continue reading… )

 

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