PUERTO VALLARTA (PVDN) – Renowned financial guru and North American influencer, Jakenomada, drops a massive bombshell on his audience. The escalating value of the Mexican peso versus the ailing US dollar threatens to spark a dramatic escape of American ‘gringos’ residing in Mexico. Pandemic-era expats are already feeling the squeeze as their living expenses skyrocket by an eye-watering 35% since 2023 kicked off. With the dollar’s persistent slump and soaring inflation, the end doesn’t seem to be in sight. Will the dollar rally in time, or is the worst yet to come?
In recent years, Mexico has become a hotspot for digital nomads — individuals working remotely for companies in their home countries. The coronavirus pandemic has only accelerated this trend, with Mexico witnessing a significant influx of foreigners settling in central neighborhoods of the Mexican capital and beyond. However, Jakenomada foresees this trend reversing if the peso continues its current trajectory of appreciation.
Speaking on his Instagram account, he said, “If the dollar falls further against the Mexican peso in the coming months, there will be a massive exodus of gringos from the country. There is no one who stays for 10 pesos per dollar.”
According to the influencer, the allure of Mexico for many digital nomads is the cost-effective lifestyle it offers in comparison to the United States. However, if the exchange rate continues to favor the peso, American nomads who are paid in dollars may find the financial incentives to stay in Mexico diminishing.
The influencer’s warning comes amidst what is being called the “superpeso” phenomenon, a historic appreciation of the peso against the dollar. The peso’s value increased by 12% against the dollar in the first half of 2023, moving from 19.5 units per dollar at the end of 2022 to 17.12 units per dollar by mid-2023.
This appreciation is attributed to the “nearshoring” relocation of Asian companies to Mexico due to the US trade blockade against China, the increase in remittances, and a favorable inflation outlook.
In the first quarter of 2023, Mexico’s Ministry of the Interior recorded almost 75,000 entries of foreigners with a US visa, an 85% increase compared to the same period in 2022.
This influx of foreigners earning in dollars has caused a significant rise in the cost of living in Mexico, impacting the housing market and prices of goods and services, a process also known as gentrification.
Gabriela Siller, director of Economic and Financial Analysis at Banco Base, predicts the peso may continue appreciating until the third quarter of the year, potentially reaching 16.9 pesos per dollar.
However, she cautions that this would depend on maintaining a positive global outlook for the Mexican economy and mitigating risk factors such as the ongoing Russia-Ukraine conflict and domestic economic policies.
As the “superpeso” phenomenon continues, it remains to be seen how the shifting dynamics will reshape the landscape for foreign digital nomads in Mexico.
PUERTO VALLARTA (PVDN) - Renowned financial guru and North American influencer, Jakenomada, drops a massive bombshell on his audience. The escalating value of the Mexican peso versus the ailing US dollar threatens to spark a dramatic escape of American 'gringos' residing in Mexico. Pandemic-era expats are already feeling the squeeze as their living expenses skyrocket by an eye-watering 35% since 2023 kicked off. With the dollar's persistent slump and soaring inflation, the end doesn't seem to be in sight. Will the dollar rally in time, or is the worst yet to come?
