The Mexican peso has risen to its highest level against the US dollar since 2017, appreciating over 7% in Q1 2023. Capital investment from the United States and China and tightening monetary policy have established the peso as the strongest currency over the past few years according to Eric Noland, senior economist at CME Group. Conversely, other Latin American currencies such as the real, Colombian peso, and Argentine peso are predicted to depreciate or remain flat against the US dollar in 2023 due to the overall dire outlook for the Latin American economy; GDP is expected to halve this year, and prolonged political uncertainty could disrupt foreign investments. The International Monetary Fund (IMF) predicts Mexico’s GDP to grow by 1.7% this year, making it Latin America’s second-largest economy while Brazil’s GDP is predicted to grow by just 1.2%. Colombia is expected to experience the sharpest slowdown, with GDP anticipated to rise by just 1.1%. The IMF expects Chile to shrink by 1%, while Argentina is expected to grow flat.
Is it possible for Mexico to continue outperforming the economy of Latin America?
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