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Surprise Surge In Mexican Retail Sales

James Boston
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Surprise Surge In Mexican Retail Sales

A strong positive surprise has been presented by the latest Mexican Retail Sales figures just released. The August numbers showed strong improvements and easily beat the market forecasts. Year on year Retail Sales now stand at 4.4% compared to just 2.0% in July, there was only an expectation for a rise to 2.7% in the market today. The month on month numbers has equally performed, it is now showing at 0.6% growth for August compared to the 0.4% experienced in July, the consensus estimate was actually for a falling of in the expansion to just 0.2% in the latest number.

The future outlook for the Mexican economy has improved greatly since the announcement of reforms in the tax, energy and education areas. Successful implementation of these reforms will lead to a more regulated environment, the absence of which has proved a deterrent for international investors over the past few decades. There is however a more immediate challenge for the Mexican authorities to overcome in order to lure more foreign firms to the country. The security situation in Mexico has long been an issue for foreign executives who are reluctant to expose themselves to the relative hazards presented by Mexican society. The most recent disappearance of 43 students in the country has made international headlines and which at best will highlight the lack of improvement in the situation. This very concern was recently raised publically by the head of the Mexican Central Bank, Agustin Carstens, who highlighted the deteriorating security situation and the resultant perceptions of the dangers of doing business in the country as the greatest challenge currently facing economic growth in the country.

Notwithstanding these challenges the Bank of Mexico chief went on to state that clear signs of growth in the economy are now evident and that the Bank expects GDP expansion to accelerate to a level of around 2.0% to 2.8% for the full 2014 year.

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