Mexico –STEEPLE Analysis By Montserrat Alvarez Nava

Exchange Rate Mexican peso (MXN) Inflation: 4% 1 USD = 13.55 MXN The latest data shows that Mexican Pesos has been gaining strength steadily since last year. Over the past two weeks, though, the Peso has hit a bump and depreciated almost 3% in that short time. This highlights the volatility and importance of foreign exchange risk for foreign investors.

Investment Climate Mexico is open to foreign direct investment (FDI) in most economic sectors and has consistently been one of the largest recipients of FDI among emerging markets. Mexico’s macroeconomic stability and its proximity to one of the largest markets in the world have attracted investors. Mexico’s new PRI government, led by President Enrique Pena Nieto, will prioritize structural economic reforms and competitiveness. According to the Secretariat of the Economy, Mexico is currently the top destination for aerospace manufacturing investments in the world. Financial services, automotive and electronics have received the largest amounts of FDI. Recently, Mexico’s auto industry gained attention from investors as Mexico became the eighth world producer of automobiles in the world.

Efficient Business… Because of the Mexican productivity, the labor market, the finances and attitudes and values.

Labor Force (data trough 2012)

Industrial Production

Mexican Economy

Taxes Property taxes are very low in Mexico as a whole. The property tax, known as a predial is .1% of the assessed value. Taxes are paid annually, with the assessed value determined at the time of sale. If you purchase a property with an assessed value of $100,000US dollars your annual tax rate would be $100.00US dollars. The reason taxes are so low is due to the fact that they have never been a source of revenue for the Mexican government

Economic Growth Potential

Strategic geographic location Mexico shares more than 3,000 km border with the U.S.A., the world’s largest economy.

Global Trade Performance (in US Billions of dollars)

Investing in Mexico In 2005 Mexico was the largest recipient of FDI in Latin America, 4th among emerging economies, and 13th in the world.

Advantages of Investing in Mexico A consumer market fuelled by macroeconomic stability. High-quality labor force. Open trade and investment policies. Mexico is one of the most attractive locations for FDI, as a NAFTA member since 1994. Annual inflation rate in 2006: 4.05% Approximated GDP annual growth for the upcoming six years: 3.6% 80% of exports are manufacturing.

Bibliography http://www.investinmexico.org.mx http://www.forbes.com.mx/que-sectores-son-ideales- para-invertir-en-tiempo-de-crisis/ http://www.globalfirepower.com/labor-force-by- country.asp http://mx.investing.com http://mim.promexico.gob.mx/doc/Documentos_de _interes/Investment_in_Mexico_2012.pdf