by Florent Michel, Managing Partner, Latina Finance & Co.
Mexico is still in recovery from the 2008 crisis. The country is slowly registering signs of improvement in its industrial production, exports and level of employment, but as yet nothing compared to the Mexico of the early years of 2000. The financial authorities have continued to deploy strong fiscal policies in order to sustain the economy, lowering interest rates from 8% in January 2009 to 4.5% today. After a short rebound at the end of ‘09, the first quarter of 2010 still registered a negative GDP growth (-0.35%) with inflation at a level of around 4%.
As a very open economy Mexico was badly hurt by the crisis and has not yet recovered. Managing cash and treasury in this type of cycle is challenging but unlike many other countries in the region Mexico provides a very flexible and cash management friendly environment.
A very large proportion of payments, maybe close to 70%, are still made today by cheques by or cash.