Challenges to Growth and Mexico’s Defiant Peso

Challenges to Growth and Mexico’s Defiant Peso

By Blu Putnam, Chief Economist & Erik Norland, Senior Economist, CME Group

Demographic Challenges to Growth

  • Changing demographics pose serious challenge to US, China growth.
  • Labor force growth in US, China set to slow or even shrink by 2030.
  • Retirees will be 21% of US population by 2030, up from 12% in 1990.
  • China’s growth of 6%-7% will likely end in 2020s, settle to around 3%-4%.
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Mexico’s Peso Shines Even as Economy Wobbles

  • Mexican peso gains against USD while regional peers decline.
  • Peso strengthens despite weak economy, multiple rate cuts.
  • Nearly 80% of Mexico’s exports are shipped to US, Canada.
  • Brazil, Chile, and Colombia rely on Chinese demand for commodities.
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