El Economista – Mexico City
Mexico is the emerging country that will benefit the most from the US economic recovery, according to James McCormack, global director of US sovereign ratings. Fitch Ratings.
He explained during his participation in the hypothetical event Fitch On Mexico, that what was previously mentioned is that no country is integrated in the US economy like Mexico, which gives it the advantage of taking advantage of various aspects, such as commercial.
“(Growth in the US) is positive for emerging countries, but more positive for Mexico. The reason is that there is no other economically integrated emerging country in the US like Mexico. It is a great advantage for Mexico,” he said.
He pointed out that Mexico is currently the second largest trading partner of the United States after China. This and T-Mec benefit the country in the current situation, after the economic crisis caused by the Coronavirus, but also the weak GDP that occurred before the pandemic.
James McCormack added that in the neighboring country in the north, as in other countries, the sector most affected was services and now, with the vaccination process and the reopening of economic activity, a recovery is taking place. For the sake of recovery of GDP.
In this sense, he said that this would be a positive side for the Mexican economy, as it could increase the flow of remittances that citizens send to Mexico.
Regarding the dollar’s weakness, the analyst pointed out that this is mostly good news for emerging countries because they are reducing their dollar-denominated debt, as was the case with Mexico last year, given the rise in the dollar’s value against the peso, and its dollar debt. Increased when converted into pesos; But he noted that the dollar debt in Mexico equates to less than a quarter of the total.
Finally, higher commodity prices are beneficial to emerging countries, but in Mexico trade continues below pre-Covid-19 levels.