Charging ahead.
by Ragir, Alexander
Consumer credit in Mexico grew just shy of 50% to hit US$23.30
billion during the first quarter of 2005, compared with the same period
a year earlier, according to the Central Bank of Mexico.
Competition among the country's banks to lend, coupled with
healthy consumer confidence in the economy, has been driving the credit
boom, says Hector Chavez, an economist at Santander Investments in
Mexico City. Mexico's credit market has historically been thin, and
many of the country's banks are noticing room to grow.
"Smaller banks want to compete also," says Chavez.
Expansionary monetary policy earlier this year also helped.
"Interest rates were historically low," he says.
Demand for consumer goods has been a shot in the arm for Mexico,
offsetting a declining manufacturing sector. The service sector, which
includes industries like tourism, added 209,000 new jobs in the 12
months ending April 2005, far more than the 5,000 jobs lost in the
manufacturing sector.
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