Wed October 9, 2013
How a Mexican Boom Could Be the Next Big Thing for Texas
This year, economists in Mexico are predicting an anemic growth rate for the country of 1.7 percent. Some say the number could be closer to 1.4 percent. However, longtime Mexico watchers, including Brookings analyst Joseph Parilla, say that’s not the big story.
“In the Mexican case, they had robust growth last year and if you look past 2013, projections are still relatively good,” Parilla says. “Growth rates are between 3.5 and 4 percent over the next five years. I think the general consensus is while 2013 will prove a difficult year for the Mexican economy, there should be a pretty quick rebound after."
Parilla discussed the Mexican economy and what it could mean for Texas with KUT’s David Brown.
With Mexico border-adjacent to Texas, impacts of economic changes there will affect the Texas economy in general, according to Parilla.
“Geographic proximity plays a role. The rise of the Mexican economy over the past two decades has been a really good thing for Texas, because a lot of the industries within Texas are highly integrated with Mexico. It’s a huge destination for Texas exports.”
That means as Mexico’s middle class grows, it’s good news for Texas goods and services. Texas is currently the largest exporter to Mexico, Parilla says.
Eventually, more people could migrate to Mexico for better economic growth and opportunity. While news about drug violence and other security issues will impact economic growth, Parilla says that the effects are mainly on certain pockets of the country.
“My understanding is that security tends to affect certain pockets of the country, and those pockets change,” Parilla said. “For instance, a multinational would be cognizant of crime rates and of other quality of life issues, but there are plenty of opportunities. There are a lot of pockets of safe states and cities.”
To listen to the entire interview, use the Soundcloud player above.