There seems to be something missing from this election cycle in Mexico: a new president will be elected on June 2 and political risk seems strangely absent from the economic – and financial – conversation.
The Mexican peso’s value to the dollar isn’t showing any signs of stress. In fact, the peso has been strengthening since April, and towards the bottom of its decade-long trading range.
When Euromoney spoke to senior bankers in Mexico recently it was the longer-term, structural drivers of Mexican growth – and, crucially, its outperformance when compared with other emerging markets – that dominated the conversation.
This was certainly the case when we spoke with Jorge Arce, chief executive of HSBC Mexico. The bank seems to be thriving on the country's exceptionalism, having recently pulled out from Argentina – the delayed piece in the retrenchment strategy that saw HSBC sell its assets throughout the region, including Brazil.
Nearshoring is obviously a large part of this, as are the strong drivers for retail banking growth, the large unbanked sector and low credit penetration, together with the tantalizing demographics.
But Arce is keen to stress other less talked-about factors, too. A key one of these is the 2021 pension reforms that increase mandatory savings contributions.
