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Mexico Real Estate Report Q1 2011
Business Monitor International, Nov 2010, Pages: 64
Mexico Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Mexico's Real Estate industry.
In each of the countries where the Real Estate sectors are reviewed by BMI, we conducted interviews with our in-country sources at the beginning of 2010 and again in the middle of the year. In some cases, the later interviews have given us a large amount of new information that has caused us to rethink our interpretation of what is happening in the Real Estate sector in 2010 and/or to review our forecasts. In a sentiment echoed by Mexico’s central bankers, we already see signs that activity in the key manufacturing sector is cooling, which we expect to have negative implications for the nascent recovery in private consumption. That said, with the US dollar carry trade keeping investor appetite for higheryielding assets elevated, capital flows are likely to continue flowing into the country’s economy, creating both problems and opportunities for the authorities.
One major obstacle for Mexico to become a regional export hub is the current state of its logistics infrastructure, although this failing also provides a massive investment opportunity over the long term, in our view. Another positive is that the government clearly recognises the need to rapidly develop the country's logistics framework. With additional funding coming from foreign private equity funds, many of which are tying up with local construction companies to push ahead with major projects, at least some of the necessary capital is now flowing into Mexico's infrastructure sector, an indication of the increasing depth of the country's financial markets and broadly investor-friendly administration.
Sound macroeconomic policies should help Mexico register sustained levels of economic activity, averaging 2.5% real GDP growth over the next decade. That said, lack of congressional support will mean the government is hard pushed to enforce much-needed structural reforms until 2012 at the earliest and, as such, the economy will struggle to meet the conditions for a convergence in living standards with other developed economies for the duration of our 10-year forecast period.
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