Mexico –STEEPLE Analysis

By Montserrat Alvarez Nava

Exchange Rate

Mexican peso (MXN)

Inflation: 4%

1 USD = 13.55 MXN

The latest data shows that Mexican Pesos has been gaining strength steadily since last year. Over the past two weeks, though, the Peso has hit a bump and depreciated almost 3% in that short time. This highlights the volatility and importance of foreign exchange risk for foreign investors.

Investment Climate

Mexico is open to foreign direct investment (FDI) in most economic sectors and has consistently been one of the largest

recipients of FDI among emerging markets. Mexico’s macroeconomic stability and its proximity to one of the largest markets in the world have attracted investors. Mexico’s new

PRI government, led by President Enrique Pena Nieto, will prioritize structural economic reforms and competitiveness.

According to the Secretariat of the Economy, Mexico is currently the top destination for aerospace manufacturing

investments in the world. Financial services, automotive and electronics have received the largest amounts of FDI. Recently,

Mexico’s auto industry gained attention from investors as Mexico became the eighth world producer of automobiles in

the world.

Efficient Business…

Because of the Mexican

productivity, the labor market, the

finances and attitudes and

values.

Labor Force(data trough 2012)

Industrial Production

Mexican Economy

Taxes

Property taxes are very low in Mexico as a whole. The property tax, known as a predial is

.1% of the assessed value. Taxes are paid annually, with the assessed value determined at the time of sale. If you purchase a property with an assessed value of $100,000US dollars

your annual tax rate would be $100.00US dollars. The reason taxes are so low is due to the fact that they have never been a source of revenue for the Mexican government

Economic Growth Potential

Strategic geographic location

Mexico shares

more than 3,000 km

border with the

U.S.A., the world’s largest

economy.

Global Trade Performance (in US Billions of

dollars)

Investing in Mexico

In 2005 Mexico was the largest recipient of FDI in Latin America, 4th among emerging

economies, and 13th in the world.

Advantages of Investing in Mexico

A consumer market fuelled by macroeconomic stability.

High-quality labor force.

Open trade and investment policies.

Mexico is one of the most attractive locations for FDI, as a NAFTA member since 1994.

Annual inflation rate in 2006: 4.05%

Approximated GDP annual growth for the upcoming six years: 3.6%

80% of exports are manufacturing.

Bibliography

http://www.investinmexico.org.mx

http://www.forbes.com.mx/que-sectores-son-ideales-para-invertir-en-tiempo-de-crisis/

http://www.globalfirepower.com/labor-force-by-country.asp

http://mx.investing.com

http://mim.promexico.gob.mx/doc/Documentos_de_interes/Investment_in_Mexico_2012.pdf