8/29/13

Mexico: Is The Aztec Tiger Starting To Whimper? - Forbes

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NathanielParishFlannery,Contributor
IwriteaboutLatinAmericancompaniesandpoliticalrisk.

L EA D ER S H IP | 8/27/2013@1:42PM | 5,205views

Mexico:IsTheAztecTiger StartingToWhimper?
MexicosFinanceMinistrycutits2013 growthforecastforMexicoto1.8%,down fromitspreviouspredictionof3.1%.Mexicos NationalStatisticsInstitutereportedthatthe countrysGDP(atleastwhenseasonally NewPosts Popular Lists Video adjusted)actuallycontracted0.74%during HighestPaidModels TopEarningTennisStars Vegas'DJWars +4poststhishour thesecondquarterof2013.Thisismorebad newsfortheeconomythatThomasFriedman hastilydubbedtheAztecTiger.Inthefourth quarterMexicoseconomygrewatananemic 0.8percent.Despitecampaignpromisesthat voterswouldearnmoreandthe introductionofanambitioussetofreform bills,Mexicoseconomystartedtoslowat Mexico'seconomymaybestartingto sputter.Phototakeninfrontofthe exactlyatthetimethatthecountrysnew MexicanStockExchangebyN.Parish president,EnriquePeaNieto,tookoffice. Flannery@LatAmLENS. NomuraSecuritiesstrategistBenitoBerber explainedFinally,aftergrowingstronglysince2010,Mexicaneconomic activitywasboundtoplateau,particularlywithfiscalheadwindsintheU.S.The marketperhapsdidnotrealizethatthefullimpactofthereformswillbefelt startingin2014,withthepeakinthecomingfiveyears. AlthoughMexicoreboundedquicklyfromtheglobalrecession,reporting5.5% growthin2010andoutpacingBrazilinboth2011and2012,recentgrowth rateshavedisappointedmanyinvestors.A3%growthrateisunderwhelming incomparisontothe5%or6%thatsomeanalystspredicted.Mexicosstock markethasfallenandinvestorconfidencemaybediminishing.Inarecent interviewHenryTricks,TheEconomistsMexicocorrespondentexplained theredoesseemtobeaveryseriouscrimeproblemhere[and]anecdotal evidencethatinvestmentisbeingcurtailedbecausecompaniesareworried aboutthesituation.Peopleareworriedaboutcrime.Tourism,oneof Mexicosmostimportantsectors,hasalsobeenaffectedbysecurityconcerns. Telecommunicationsreform,educationreform,fiscalreformandenergy reformareallambitiousprojects,butthegovernmentneedstomakesureit canimplementthesemeasuresandturncampaignpromisesintopolicies. Overallthough,manyofMexicoseconomicproblemsstemfromweakgrowth incountriesaroundtheglobeingeneralandintheU.S.inparticular. AlthoughMexicocontinuestoemergeasanautomotiveindustryheavyweight,
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8/29/13

Mexico: Is The Aztec Tiger Starting To Whimper? - Forbes

inrecentyearsthecountrystopincomedecilehasbenefitedthemost,even whilemanymiddleclassfamiliessawtheirincomesstagnateorevendecline. Thecountrysbillionaires,ontheotherhand,havedonequitewell. AccordingtoaForbesreport,in2013CarlosSlim,Mexicostelecom magnate,increasedhisnetworthby$4billionoverthepreviousyear,afeat thathelpedhimearthetitleofworldsrichestmanforthefourthconsecutive year.Hispersonalwealthisestimatedtobeover$73billion.AsIexplainedin apreviousarticle,In2012SlimsAmericaMoviltelecomcompany reportedtotalrevenuesof$62billion,a6percentjumpfrom2011.The companyaddedmorethan1millioncellphonecustomersinMexicoduring thecourseoftheyear. AccordingtoForbesanalysis15ofLatinAmericas99billionairesarefrom Mexico.AsIexplainedinapreviousarticle,Whilenearlythreequartersofthe residentsinMexicoscountrysidehavesubmiddleclassincomelevels,three ofthetopfivewealthiestindividualsinLatinAmericaarefromMexico.For instance,AlbertoBailleresGonzalez,whoservesasthechairmanofIndustrias Peoles,isthesecondwealthiestmaninLatinAmerica.Hisnetworthtops $18.2billion.MexicosthirdwealthiestbusinessmanisGermanLarreaMota Velasco,theownerofminingcompanyGrupoMexico.Heisthefifth wealthiestmaninLatinAmerica.ForbesestimateshisnetworthatUS$16.7 billion.HiscompanyGrupoMexicoreportednetincomeofover$2billionlast year. Overall,Mexicosbillionairescontinuetodowellevenastheeconomyslows. Althoughtheslowgrowthmaybeashorttermdisappointmentforinvestors,it maybealongtermbenefitforMexico,ifsluggishgrowthcanhelpspurfurther economicreforms.Inthemediumterm,Mexicowillneedtoworktoboost consumercreditaccessandspurdomesticdemand.Afterall,Mexicosmiddle classhaswaitedalongtimeforthebenefitsfromhypeabouttheAztecTiger. Inadditiontobeingthehomeoftheworldswealthiestman,Mexiconeedsto focusonimprovingtheprospectsofmiddleclassfamilies. Inatoughglobalenvironment,Mexicoseconomymaybestartingto whimper.Furthereconomicreforms,however,couldhelpunleashtheAztec Tigerslatentpotential. FollowmeonTwitter:@LatAmLENS.

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Mexico: Is The Aztec Tiger Starting To Whimper? - Forbes

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CALLEDOUT ExpandAllComments JohnWagner 1dayago

Andthepoor?AmIsurprisedthataForbesarticlewouldignoretheplightofthe47%of Mexicanswhofallbelowthepovertyline?
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NathanielParishFlannery,Contributor 1dayago

http://www.forbes.com/sites/nathanielparishflannery/2013/07/23/whats therealstorywithmodernmexicosmiddleclass/ JohnthelinebetweenmiddleclassandpovertyinMexicodiffersgreatly dependingoncontext,geography,andthedefinitionsimposedbythe researcher.But,ifyoulookatthelatestanalysesfromMexicosNational StatisticsInstitute,unlikemanyofthepeopleinthecountrysmiddleincome brackets,Mexicospoorestresidentshaveactuallyseentheirincomesrisein recentyears.

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JuanCastillo 1dayago

ThisisjustastrategyofthebigcompaniesthatwantapieceoftheMexicanoil,theyjust devastatingandgivingfalsestatementsaboutMxicosotheycancrumbletheeconomy, THEDOGSAREONTHECHASE,piceofshitall.

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