Mexico resilient as US slows

Mexico has been one of the best performing markets year to date – up 9.9% in US$ terms - despite the economy's exposure to the slowdown in the US.

According to Urban Larson, manager of the F&C Latin America Equity Fund, the resilience of the Mexican economy has surprised the market.

"Last year the Mexican market did pretty badly in anticipation of a bad 2008. But so far the economy has been surprisingly resilient," he said. "During the last US recession of 2000, Mexico was hit because its economy lacked drivers other than exports to the US," he explained. "But things are more balanced now. Banks are lending, which wasn't the case before, and solid finances allow the government to have counter-cyclical fiscal policy in place, using the windfall from oil revenues for social spending and infrastructure investment."

Larson added that despite the risk that the US slowdown will come to hurt the Mexican economy more than it has so far, Mexico currently offers attractive investment opportunities, in particular in the wireless, housing and infrastructure sectors.