Aberration or design feature?
By Don Quijones: With Brazil, Latin America’s largest economy, mired in its deepest recession for years, with Venezuela perpetually poised on the edge of the abyss, and with Argentina facing a treacherous period of political and economic transition, Mexico is once again drawing the attention of international investors.
The economy could grow as much as 3.5% in 2015, predicts Mexico’s fifth largest bank, Banorte. The OECD expects it to expand by at least 3%.
A Model Economy
In recent years, glowing economic forecasts have become a New Year formality for Mexico. Economists representing international banks and supranational institutions like the OECD and the IMF confidently predict record-breaking annual growth for the year to come, only to spend the rest of the year frantically downgrading their predictions until, by November or December, they’re more or less spot on.
That’s not to say that Mexico’s economy doesn’t have important points in its favor, especially at the macro level. Unlike Brazil and many other Latin American economies, Mexico is not heavily dependent on Chinese demand for its commodities, although the economy has been hit hard by cascading oil prices. And although the peso depreciated by 17% last year, the official inflation rate is still comfortably below the 2% line — compared to over 10% in Brazil. Meanwhile, things are so bad in Argentina that the National Institute of Statistics has stopped publishing official inflation figures altogether. As for Venezuela, the less said the better.







