IL Postcard

Now is the Time to Start a Business in Mexico

Date: 02/25/2007

Ever consider starting a business in Mexico? Recent statistics published in Mexico's El Universal newspaper indicate that now could be a good time to do so.* The article cites the tenure of former President Vicente Fox as one of the country's best in terms of the economy and consumerism.

During Fox's six-year term (from 2000 to 2006), consumerism grew by 23%, fueling retail and wholesale business, which grew by 18% and 25%, respectively. Mexicans were able to spend more, thanks to better salaries and more widely available credit. A local study indicates that from 2000 to 2005, salaries rose some 48% and the amount of home loans issued increased by 62%. Credit cards came into vogue; the amount issued rose a whopping 170% between 2002 and 2006.

Lower inflation also contributed to the boom. The administration's efforts to stabilize inflation and the economy were highly successful, and inflation was maintained at about 5% throughout Fox's term-Mexico had not seen a variance level this low since the 1970s.

Will new President Felipe Calderon be able to sustain this growth? Consumerism in Mexico represents 67% of the GNP. Some economists predict that consumerism will continue to grow, perhaps at annual rates between 3.5% and 4.2% (i.e., a slower rate than before, but still above the predicted GNP growth for 2007 of 3.5%). Jonathan Heath, chief economist for the Mexico unit of HSBC Bank, says Calderon's greatest challenge will be to strengthen the local economy while incorporating the significant "informal economy" - which employs vast numbers of Mexicans.

Best Regards,

Suzan Haskins
Editor / www.MexicoInsider.com

P.S. We'll cover topics relevant to opening a business in our upcoming Live & Prosper in Mexico Seminar, scheduled for June 3-5, 2007 in San Miguel de Allende. Learn everything you need to know to make an informed decision about moving to Mexico…and have some fun, too. For more information, e-mail Events@InternationalLiving.com

*Source: El Universal, Consumo, la base del dinamismo con Fox, February 22, 2007.