Welcome to Latinometrics. We bring you Latin American insights and trends through concise, thought-provoking data visualizations.
Economy π±
The US dollar hasn't been this cheap for Mexicans since December 2015.Β What are the implications of a strong peso and a cheap dollar from Mexico's powerful neighbor?
First, there's the good: Mexican businesses and consumers can buy foreign goods, invest, and travel more inexpensively, leading to stronger commercial relationships and quality of life. Also, as foreign investors expect the peso to continue rising (thanks largely to the broader macroeconomic trend of nearshoring), they inject more capital into the country, creating more jobs and economic prosperity.
Our Partner this Week π€
Fast-growing Fintech companies often develop very versatile tools, yet disconnected from one another.
Currently, HubSpot is one of the most integrated platforms. It features hundreds of integrations, security standards, and the ability to scale and adapt according to each company's business model.
They've created a free ebook (in Spanish) that provides practical solutions for optimizing a Fintech business.
Then there are the potential downsides: Mexican goods are more expensive, whichΒ can hurt trade, the country's most significant economic activity. A strong peso also makes tourism more expensive, which accounts forΒ 9%Β of the overall GDP.
By most measures,Β including tourism, Mexico is overcoming the hurdles that a strong peso could bring. So much investment has beenΒ announcedΒ this year by manufacturing and technology companies that it's hard to keep up. It's also hard to imagine the usual cons of a strong currency outweighing the current economic boom.
After all, the dollar being the historically strongest currency didnβt stop the US from becoming the biggest economy on the planet. Speaking ofΒ "strongest,"Β in the past five years the Mexican peso has appreciated the most out of the 20 main currencies in circulation, even beating the Swiss franc by a small margin.
In recent years, Mexican companies and investors have foundΒ that expandingΒ into the US market is increasingly affordable. According to theΒ US Bureau of Economic Analysis, MexicanΒ direct investment in the United States went from $19.5B in 2019 to $33.7B in 2022 (latest data available), a remarkable 73% increase.
Renowned Mexican brands likeΒ Grupo Bimbo,Β Cemex, andΒ Arca ContinentalΒ are doubling down on their presence up north, from acquiring local businesses to opening new manufacturing plants. Mexicans are also now theΒ top foreign buyersΒ of US real estate.
The big question on everyone's mind is: How long will the super peso and economic boom last? Nobody ever knows, but one thing is clear: Mexico's momentum is one of the most exciting in the world.
β
Comment of the Week π£οΈ
Marcelo brings to our attention a brand weβd never heard about: Sweet & Coffee in Ecuador. After looking into it, they have also managed to serve the countryβs appetite for coffee. Starbucks is set to open its first store in Ecuador this year. In response to our Juan Valdez chart on Twitter.
Join the discussion on social media, where weβll be posting todayβs charts throughout the week. Follow us onΒ Twitter,Β LinkedIn,Β Instagram, or Facebook.
Feedback or chart suggestions? Reply to this email, and let us know. π