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2018 Country Focus: Mexico

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AMLO was elected as president, his win put a leftist leader at the helm of Latin America´s second largest economy for the first time ever, while the main concerns that could impact the economy are disruptions in NAFTA negociations

 

Macro-economical environment

Main Indicators

Top Commercial Activities

GDP Growth

  • 2016 – 2,3%
  • 2017 – 2,2%
  • 2018 – 2.2%- forecast

Population: 123 millions
Unemployment Rate: 3,5 %

  1. Automotive
  2. Electronics manufacturing
  3. Agriculture
  4. Tourism
  5. Mining
  6. Aerospace industry

 

 

Strengths

  • Strong and healthy economic banking system, solid external balance
  • Good solvency, moderate debt ratios and flexible exchange ratios
  • Structural business enviroment exceeds Latin American average
  • Member of NAFTA, OECD, The G20 and the Pacific Alliance

Weaknesses

  • High export concentration to US market (more than 80% of exports go to US).
  • Skewed income distribution, high poverty levels
  • Poor domestic Security linked to Drug Traffic
  • Rule of Law and control of corruption (Below Latin America´s average)

Trade structure

Top 5 countries of exports

  • United States (81%)
  • Euro area (4%)
  • Canada (3%)
  • China (1%)
  • Japan (1%°

Top 5 countries of imports

  • United States (41%)
  • China (18%)
  • Euro Area (9%)
  • Japan (5%)
  • South Korea (4%)

What's new?

Andres Manuel Lopez Obrador was elected as president, his win put a leftist leader at the helm of Latin America´s second largest economy for the first time ever. The main concerns that this could bring, are a higher budget deficit, increase in public debt, disruptions in NAFTA negotiations ( tariffs and search for nontraditional markets), exchange rate volatility for importers, reduced or restricted bank appetite/increase interest rate.

Trade Credit Insurance

Credit Insurance Market

  • Focused on ground-up insurance
  • Low penetration rate

Available products

  • Ground-up
  • Medium-Term
  • Debt Collections
  • Excess of Loss

Insolvencies

  • Main insolvencies occured in the energy sector with a total of USD 7,5M
  • Average Day Sales Out (DSO): 120 days
  • Average credit terms: from 30 to 90 days

Main Players and ranking

  • 37% Atradius

  • 33% Solunion

  • 28% Coface

  • 3% Cescemex

The market totaled 1079.91 Million MXN in 2017.

All the written material is the property of Rimac, this article has been written by Mónica Anabel Gordillo Rincón.
Author of the photograph : Alejandro Islas Photograph AC