Can Mexico Reclaim Its Title as Latin America's Economic Powerhouse? Eduardo Arcos - Global Risk Insights
go to original March 5, 2016

With Mexico outperforming Latin America’s other major economies, the continent’s second-largest economy looks set to take a leading role once again.

Latin America has seen brighter days. The latest figures released by the International Monetary Fund (IMF) show that the region’s economy contracted by 0.3 percent in 2015, making it the worst performing region in the world. This has come on the back of a severe recession in Brazil, Latin America’s largest economy, which, together with Venezuela and Argentina, has suffered badly from failed policies and economic mismanagement.

In contrast, Mexico’s economy has weathered global headwinds, registering 2.5 percent growth. So, is this Mexico’s long awaited moment? And can Mexico, the region’s second-largest economy, lead South America once more?

It was not long ago that Mexico was the sick man among Latin America’s major economies, with Brazil, Argentina and Peru enjoying a decade of impressive growth amidst an unprecedented commodity boom.

In fact, in the decade to 2012, the region as a whole averaged growth of 4.1 percent, while Mexico’s economy grew at a rate of 3.3 percent. During this boom, Latin America experienced an economic transformation with laudable achievements: More than 70 million were lifted out of poverty while the middle class expanded by more than 50 percent.

Yet these developments were not echoed in Mexico, where the poverty rate stagnated. Even today, over 46 percent of the population live in poverty, with a third of Latin America’s extreme poor in Mexico.

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