Mexico waits for the tequila sunrise

A SUPPLEMENT TO EUROMONEY – MEXICO

Walking an economic tightrope

Two years after the hit-and-run accident of the tequila crisis some observers say the Mexican government is still driving without a seatbelt. According to the country’s harshest critics Mexico’s future seems depressingly predictable. They expect the trade balance to move into deficit this year as economic growth fuels imports. This will force the government to rely more heavily on debt finance, which still accounts for 60% of foreign currency inflows.