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Mexico saw moderate growth in 2015; the International Monetary Fund (IMF) attributes the slowdown to the fall in US industrial production, financial market volatility and reduction in oil production.Still, the country increased four positions in the most recent World Economic Forum (WEF) Competitiveness Ranking (from #61 to #57). The improved ranking is due to the efficiency of Mexico’s financial and goods markets, improvements in the business sophistication and fostering innovation categories, and recently implemented reforms. Some of the biggest changes being in areas such as energy, telecommunications, economic competence, labor and education.
New international free trade agreements were also put in place to help revamp the national business environment – to date, Mexico holds agreements with more than 50 countries. Export diversification and foreign direct investment also saw significant improvement during 2015. The country’s involvement in the Pacific Alliance – an initiative to boost the economy and enhance the region’s connections with the rest of the world – has also helped keep its position as the 13th biggest economy in the world and the 11th based on purchasing power. It is expected that Mexico will be the 7th largest economy worldwide by 2050.
More alliances on the horizon
Mexico has been actively participating in the Trans Pacific Partnership (TPP) since 2012, a pact between 12 countries to increase Made-in-America exports, promote economic growth and secure jobs, among other things. If implemented and maintained successfully the TPP is expected to be the world’s largest trade partnership in 20 years, and will give Mexico access to principal economies, including those in the Asia-Pacific region.
Mexico and Hong Kong have announced plans to begin a Reciprocal Investment Promotion and Protection Agreement (RIPPA) in 2016. It provides national and foreign investors a legal framework that offers stronger protection for foreign investment in Mexico and Mexican investment abroad. Hong Kong is already a large trade partner of Mexico and a big destination for Mexican exports to the continent. The IMF estimates Mexico’s economy will grow from 2.3% in 2015 to 3.0% in 2017 if there is an increase in private consumption, investment and manufacturing exports. The country’s journey towards the digitalization of the accounting, payroll and taxation processes will also bring changes to the business customs this year.
By Fernando Garrido
Source: tmf-group.com
TMF Group is a Global Business Operator with a presence in many countries.
Mexico has been actively working to improve its competitiveness, and kicks off 2016 as an attractive country for investors worldwide.
