In 2001, Goldman Sachs business guru Jim O’Neil coined the term "BRIC economy", referring to the explosive growth of the emerging countries of Brazil, Russia, India, and China.  By 2050, the combined economies of these four countries are projected to eclipse the cumulative  economies of the current richest countries in the world.

However, O’Neil, for all of his brilliant insight, may have inadvertently overlooked the burgeoning economy just below the border: Mexico.

If stories of drug violence, illegal immigration, swine flu are making you hesitate about investing in Mexico, then you should seriously take a closer look.  According to Moody’s Latin America, Mexico is racing out of the recession, recording a 4.3% growth rate thus far in 2010 (faster than the U.S.) and a 10% trough-to-peak increase which bests almost every other economy worldwide.  Moody's expects this growth to continue.

Bloomberg reports that the peso has gained 7.5% against the dollar so far this year, beating every other major currency.  The peso is expected to rise another 11% by the end of 2010.

Mexico also boasts the lowest business tax out of 10 major countries and 95 cities, accoprding to auditing firm KPMG. Property taxes, at 1% annually, are minuscule in Mexico. Capital gains taxes in property appreciation can be exempted if you can show that you use the property 6 months out of the year.

Mexico’s unemployment performance is now stronger than any other economy except South Korea and the Netherlands.  At 5.1%, Mexico easily beat the U.S. (9.9%), Canada (8.1%) and China (9.4%). 

That could explain why real estate development in Mexico is far outpacing growth in other countries. One of the hottest spots is the coastal real estate market, expected to grow faster than any segment in the Americas and internationally.

Already over 18,000 American companies are investing and operating in Mexico and 1 million Americans now live, work, invest and retire south of the border, more than any other place in the world.  This number is expected to quadruple in the next decade, as an aging America finds itself with over 100 million citizens above the age of of 50, many looking for a cheaper place to retire that offers good healthcare at a lower cost and a warm tranquil lifestyle. 

Mexico may become the biggest BRIC economy yet.