In the past couple of years, Mexico’s economy lagged behind, due mostly to low oil prices and reduced external demand. In August 2016, Mexico’s sovereign credit outlook was lowered from “stable” to “negative” by Standard & Poor’s, signifying a possible further downgrade over the next two years.
Corruption, High Crime Rates and Violence
Despite an improvement in its ranking on the Corruption Perceptions Index, its long-standing corruption continues to have a bad effect on investments in sectors such as security, education and health. The U.S. Overseas Security Advisory Council (OSAC) came out with its ratings, stating the overall crime and safety situation in Mexico as ‘critical’ and above average. The most frequently reported crimes include the big four: armed robberies, kidnappings, car thefts, credit card fraud and more. Methodical and efficient steps must be taken to improve the quality of life in the country to counter these ratings. (4)
Despite economic challenges, Mexico’s IT-BPO Sector is thriving, forecasted to continue at a compound annual growth rate (CAGR) of 11 percent between 2016-2018, and estimated to reach $26 billion by the end of 2018. Startups in the country are also booming, especially in the Financial Technology sector, with popular names like Aspiria, Banlinea, Chapulin, Clip, Eiya, Kiwi, Prestadero and more. Mexico City and Guadalajara will see competition booming from other regions of the country. (5)
In the Doing Business 2017 Report by the World Bank, Mexico ranked 47th out of 190 countries with noted improvements areas such as dealing with construction permits, enforcing contracts, registering property, and resolving insolvency. According to the bank, Mexico has the most advantageous business atmosphere in all of Latin America. (6)
Story by: Kate Tulloch-Hammond