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Mexico Outlook:  Cautious Optimism

This year will be a difficult one for Mexico, but next year should be better, foreign investors say.


Despite the slowdown in Mexico's economy (Latin America's second-largest after Brazil) and concern about surging crime, foreign investors are generally optimistic about the country's outlook the next two years.  "Mexico’s economic outlook for the next two years appears to be a promising one," says Griselda Hernandez, Mexico country manager for U.S.-based transport giant UPS.

Her optimism is - ironically - based on Mexico's trade outlook. Although 80 percent of Mexico's exports go to the U.S. market, and thus has been affected by the U.S. economic slowdown, the country is increasingly diversifying. It has signed 12 free trade agreements with 43 countries throughout North America, Europe, Latin America and Asia, including the Economic Association Agreement with Japan, Hernandez points out. That comes on top of Mexico's membership in the North America Free Trade Agreement (NAFTA), which provides it duty-free access for most products to the United States, the largest market worldwide - even when it faces weak growth.

Jorge Cortes, managing director in Mexico for U.S.-based American Power Conversion (APC), agrees. "We’re in the middle of some challenging scenarios," he says."[However], we’re optimistic. We look at the internal markets that have been stronger in the past. Telephony has been showing very aggressive growth the past two years. Foreign investment has grown positively."


In fact, telecommunications and infrastructure are seen as the sectors that will show the strongest growth the next two years. "The main catalyst for the economic boom within the next years will be in the infrastructure sector," says Carlos Guzman, CEO of the Mexican subsidiary of U.S-based computer giant Hewlett-Packard.

President Felipe Calderon...

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Keywords: Competitiveness, Crime, Energy Reform, GDP, Inflation, Movistar, Scotiabank, Telcel


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