Mexico: the preferred Safe Haven for Investors

A study by conducted by HSBC

HSBC conducted a study called "Three friends along the way: Mexico, Brazil and Argentina", which in this study it talks about the economic outlook for the coming years of these three countries, and highlights that Mexico is considered the "favorite" for investors.

In the case of Mexico, the study considered that much of the reason of why it would be a good location for investors, it's because of time and the reforms that have been proposed in the new government of President Enrique Peña Nieto, where the Secretary of Finance, Luis Videgaray, has also indicated that a tax reform is urgently needed and that this new project would open several doors, but HSBC also recommended to observe the conditions conservatively because they are all not yet known.

In regards to Argentina, the study explains that the main concern lies on the growth of the Gross Domestic Product (GDP) of that country, which is expected to have a recovery of 2.5% in 2013; however, Argentina also faces two risks which are a technical default and acceleration in inflation.

The high degree of uncertainty for Brazil is associated with the renewed government intervention at the micro level, and HSBC is forecasting that the economic growth of Brazil will be 3.0% for 2013, from 1.1% at the end of 2012.

Changes in the economy of Mexico were one of the strongest areas that President Peña Nieto promoted during his presidential campaign, and now as leader of the country.

Brenda.Colon@sandiegored.com

Omar.Martinez@sandiegored.com

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