IN 2011 Mexico, The Pound Not Bric

In 2011 Mexico, the pound, not BRIC


The Mexican economy seems to be the safest emerging markets, says Walter Molano of BCP Securities, has acted prudently and will cope with the volatility present: Manuel Guzman Ixe.

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Mexico, toward the end of the crisis? By: Isabel Mayoral Jiménez

MEXICO CITY (FORTUNE) - Due to prudent macroeconomic management and its proximity to the United States, whose economy is beginning to show improvement, Mexico appears to be the only safe place within the emerging markets, mainly in Latin America, says Walter Molano chief economist at BCP Securities.



Although monetary expansion applied Federal Reserve (Fed) had no impact on U.S. consumer prices clearly "winds blew over the inflationary fires along the developing world and therefore we can not return to the group called BRIC (Brazil, Russia, India, China) in search of global growth. They will be very busy slowing their own economic activity levels in order to keep inflation under control, "he says.



After the 2009 crisis, Mexico acted wisely, to increase its international reserves , oil and insurance is a new flexible credit line with the International Monetary Fund (IMF), says Manuel Guzman, chief economist at IXE Grupo Financiero .



"We continue to see volatility in financial markets, but Mexico has favorable conditions to address these movements," he says. In fact, the relevant implication for Mexico of the measures taken by the Fed, which are intended to boost confidence, reviving credit, create jobs and bolster U.S. growth, is that financial capital will seek higher yields.



"Mexico has the highest rate differential over the United States between the emerging world, but the asset quality is higher, attracting less speculative capital. In all this, the key for Mexico is that flows from tourism and remittances s recover, which depend on recovery in the employment structure, it underlines Guzmán.



While Europe will continue in 'doldrums', where years of deflation and painful adjustments these countries are still waiting as they struggle to realign their relative prices, the outlook for 2011 is very different from 2010, mentioned Molano.



"The United States will move to the driver's seat, as emerging markets and Europe are reduced. This is good news for Mexico, which lacked much of the euphoria of last year related to the BRIC . However, the positive scenario is the shelves for us is subject to U.S. consumers feel confident enough to return to the shops and spend, spend, spend, "he adds.



After three years of promoting global growth, the economic engine of the emerging markets is finally overheating . Inflation is clearly on the rise in countries such as China, Brazil, India, Argentina, Venezuela and Ukraine.



The Chinese consumer prices rose 5.1% annually in November and producer prices jumped 6.1% year over the same period of time, which led to increased interest rates in 25 basis points on 25 December and similar monetary policies are being copied across the spectrum of emerging markets, as central banks try to keep inflation under control.



"Unfortunately, the outlook over the emerging markets is also problematic. The first problem is complacency. With the exception of Mexico, most politicians in emerging markets, particularly in Latin America, drank (tetra ) BRIC Kool Aid "highlights Molano.



They really thought they were immune to the problems in the developed world. This, in itself, a sufficient condition for an unpleasant surprise. The second concern is the massive deterioration in external accounts. On the eve of the collapse of Lehman Brothers, the Latin American numbers were good.



The combined current account surplus was U.S. $ 25.000 million . The region had the resources to absorb a massive external shock. However, the current account deficit for 2010 will be 34.000 million and more than 50.000 million for 2011, so the mattress is gone.

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