By Stephen Eisenhammer
Mexico appears to be the new Latin American darling for investors. With Brazil stalling, Latin America’s second largest economy is back in, after nearly two decades out in the cold.
Rising transport costs and higher wages in China are tipping manufacturing competitiveness back in favour of Mexico for the first time since the Asian giant joined the World Trade Organisation in 2001.
Mexico’s new president, Enrique Pena Nieto of the PRI party which governed continuously for 71 years until 2000, appears serious about wringing necessary changes to the state-run oil company – Pemex, the education system, and the monopolised telecoms sector.
JP Morgan said the improvements could call for an outlook upgrade from the ratings agencies in the near future.
“The approval of the labor reform last year was quickly followed by important first steps to overhaul the educational system, signalling the administration’s commitment to the reform agenda,” the bank said in a note.