On Sunday afternoon a group of us from church were eating brunch at one of our favorite breakfast spots in Melaque. We sat outside on the sidewalk to enjoy the sun and the passing parade of tourists.
A friend noted that almost all of the young people walking past looked as if they had dressed for southern California. Designer jeans. Snazzy sneakers. Stylish shirts. And they most likely rolled into town from Guadalajara in a recent model shiny SUV.
They were walking representatives of Mexico's economic success. A thriving middle class -- making up between 40% and 60% of the Mexican population -- in the world's 12th largest economy.
The foundation for that growth came in the 1990s when two presidents of the then-dinosaur PRI party liberalized the economy. And despite several slow years in the early 2000s, Mexico's GDP has expanded by 3.9% for each of the last three years. The White House would give its left wing-nut for growth that dynamic.
But there appears to be a fly in the chicken mole. The Financial Times reports that Mexico's first quarter growth numbers were not good. The last quarter of 2012 showed a growth of 3,2%. The market knew the numbers would be down for the first quarter of this year -- predicting something in the range of 1.2%. The real number was worse. Just 0.8%. A disappoingtly American-style number.
That means the 2013 growth rate may be as low as 3.05%. Still within the fast growth category.
The report indicated I may even have something to do with the fact that the second quarter is off to a much faster growth rate. "Car
sales, for example, rose 19.5 per cent in April, its fastest growth
rate since March of 2010 when sales last declined, while vehicle exports
ended their two-month slide last month to grow 2.8 per cent." The New Escape has been doing its patriotic duty.
Mexico has some long-range economic problems. Much of its infrastructure is dated. But it is doing something about it. On our drive north, my brother and I commented on the miles and miles of new roads that are being built. Plus the piggy-back lines of new trucks being imported from The States to transport the products that keep Mexico's economy growing so fast.
I may start looking at getting more Mexican assets into my portfolio. This may not merely be an adventurous place to live. It may also prove to be proftiable.