Against the backdrop of critical national elections and the ongoing renegotiation of the North American Free Trade Agreement, 2018 was likely to be a turbulent year for Mexico. In spite of this, the business community remains highly optimistic. In the latest OBG Business Barometer: Mexico CEO Survey, conducted between September 2017 and March 2018, 88% of the more than 150 executives polled had positive…
Driven by an ongoing process of economic opening since the 1990s, Mexico has come to establish a solid macroeconomic base. Structural changes have allowed the country to improve trade flows and helped to soften the impact of a gradual slowdown in hydrocarbons production and exports. The rise of the country’s manufacturing base on the back of the North American Free Trade Agreement (NAFTA), instituted…
Mexico is a federal republic constituted by the legislative, executive and judiciary branches of government. The Congress of the Union consists of two chambers: a Chamber of Deputies with 500 members, elected every three years, and a Senate composed of 128 representatives, elected every six years. In both cases, seats are chosen through a combination of direct election and proportional representation.…
After absorbing heavy lessons that accompanied the financial crisis of the 1990s, Mexico’s banking system established a solid regulatory environment, and this resulting resilience allowed it to sail through the worst consequences of the 2008-09 global financial crisis. Today, stemming from further reform measures, Mexico’s banking industry enjoys high capital adequacy ratios and is benefitting…
Despite having a diversified economy and the second-most actively traded emerging market currency in the world, Mexico’s capital markets have remained underdeveloped relative to its potential. The same regulatory caution that helped strengthen the banking industry after the 1994-95 financial crisis also designed a tight oversight framework for the bourse. As the system was reinforced, new investment…
With high levels of employment in the informal sector and a significant section of the population living in poverty, Mexico has traditionally been a challenging market for insurers. Added to this, a high level of exposure to earthquakes, hurricanes and other natural disasters presents a permanent issue for insurance firms. This was highlighted in September 2017, when two powerful earthquakes hit the…
While advanced economies generate the vast majority of insurance and reinsurance business, emerging markets are posting higher rates of growth. Complementing this underlying trend is a strong and expanding interest in catastrophic risk, which by nature tends to pertain to emerging markets. This is coming alongside fast-paced, sector-transforming innovation, which could provide a major boost to industries…
With the impact of reform permeating all corners of the energy sector, Mexico’s economy is undergoing a rapid transformation. The extensive regulatory changes that began in December 2013 are helping to attract large volumes of foreign and domestic investment into hydrocarbons exploration, downstream fuel distribution and renewable energy generation. Private oil and gas producers, virtually barred…
While renegotiations of the North American Free Trade Alliance (NAFTA) have led to an environment of uncertainty for Mexican industry, the automotive sector remains solid and on track for further development driven by rising vehicle production, local sales and export demand. As the world’s seventh-largest manufacturer and the third-largest exporter of light vehicles – behind Japan and Germany –…
With exports averaging a 15% annual growth rate over the past decade, Mexico is positioning itself as a global leader in the aerospace industry. According to US aircraft manufacturers Boeing, the number of commercial aircraft around the world is expected to double by 2035, translating into strong demand for manufacturing. This, in addition to the emerging military and space segments, is expected to…
