The Mexican economy: Umpteen reasons to be hopeful

It’s a country with one of the biggest markets around (more on that later), yet it’s also one which hasn’t exactly experienced plain-sailing in relation to its economy over recent years.

However, reports are suggesting that the Mexican economy is most certainly on the right track – and perhaps being one of the more encouraging places to invest.

Following on from the above, what’s fueling such growth? Here, we’ll take a look.

Private equity is soaring

Something that has aided the situation substantially is the private equity sector. This has existed for years in Mexico, one only has to look at the investments Rene Escobar Bribiesca has made to see that, but over recent times its size has exploded.

The Financial Times recently reported that Mexico had the largest private equity share in Latin America. Just five years ago, it held just 5% – the difference is bordering on the unbelievable. When one also considers the fact that Brazil had 80% of this market in 2011 and pretty much dominated it, it makes the conclusions even more spectacular.

Part of the reason behind the turnaround is because Brazil have slumped a little, but on the whole the Mexican government is largely to thank. They have implemented various policies which have encouraged investment in this sector no-end and if recent developments continue, the future for Mexican private equity investment looks very bright indeed.

The market is vast – and confidence is growing

122 million. That’s the amount of residents that Mexico has. To put this into perspective, you’d have to join the residents of Spain, Portugal and France together to make up such a figure. It means that the market is absolutely gigantic in Mexico.

It’s no secret that the country is well and truly over the economic problems that blighted the world several years ago, meaning that confidence is almost at an all-time high. In other words, the potential target market for investors is both massive and willing.

There is a huge high-end target market

As well as the market in general, Mexico happens to house a lot of high-end consumers. There are a total of 16 billionaires in the country, while if one looks at the wealthiest 10% of households in the country the picture is even more optimistic. The average salary for these households is $33,000, meaning that consumers do have money available to respond to companies entering the market.

Big brands haven’t been deterred

Another hugely positive factor to report on is the attitude of big brands in Mexico. Let’s not forget that none of them have been deterred in investing in the country over the years, it is still home to the likes of Coca-Cola, Anheuser-Busch and a whole selection of other worldwide companies.

The fact that all of them have stuck in the country highlights the force it is becoming. In other nations they may have been quick to relocate, but Mexico is proving attractive and as the above reasons have indicated, it’s no surprise why.

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