Mexico Economic Forecast

Mexico Economic Outlook

March 12, 2019

Fourth-quarter national accounts were bleaker than initially thought, highlighting the increasingly challenging economic backdrop dominated by heightened policy uncertainty and a slowdown north of the Rio Grande. A supply-side analysis pinned the letdown squarely on the industrial sector, which was held back by plunging mining activity and a slump in construction works. Manufacturing output, however, was the main culprit, decelerating for a second consecutive quarter amid a slowdown stateside. Agricultural- and services-sector output, meanwhile, held up. Turning to the current quarter, available indicators have been more upbeat. Consumer confidence hit a record high in January on AMLO’s first months in office, while industrial-sector surveys revealed new optimism among firms in February. On 1 March, however, S&P Global Ratings cut its outlook on Mexico’s investment-grade credit rating on fears of exacerbated fiscal woes and decreased private-sector investment as the government aims to hike spending on heavily-indebted Pemex, the state-run oil company.

Mexico Economic Growth

Domestically, buoyant household spending will struggle to offset flagging investment this year as firms hold off in response to policy uncertainty. On the external front, the stateside cool-off will hit exports. Ratification of the new NAFTA, meanwhile, could face headwinds—although most analysts still see it as a done deal. Met the why particular analysts lowered their full-year growth forecasts in recent weeks and now see growth at 1.8% this year, down 0.1 percentage points from last month’s forecast. Next year, they see growth at 2.0%.

Mexico Economy Data

Population (million)118120121122124
GDP per capita (USD)11,77311,9649,6548,8049,325
GDP (USD bn)1,2751,3121,1681,0761,152
Economic Growth (GDP, annual variation in %)
Domestic Demand (annual variation in %)
Consumption (annual variation in %)
Investment (annual variation in %)-
Industrial Production (annual variation in %)-
Retail Sales (annual variation in %)
Unemployment Rate4.
Fiscal Balance (% of GDP)-2.3-3.1-3.4-2.5-1.1
Public Debt (% of GDP)11.042.646.648.746.2
Money (annual variation in %)11.711.
Inflation Rate (CPI, annual variation in %, eop)
Inflation Rate (CPI, annual variation in %)
Inflation (PPI, annual variation in %)
Policy Interest Rate (%)3.503.003.255.757.25
Stock Market (annual variation in %)-2.21.0-
Exchange Rate (vs USD)13.0414.7517.1820.7319.65
Exchange Rate (vs USD, aop)12.7613.3115.8818.6918.91
Current Account (% of GDP)-2.4-1.8-2.5-2.2-1.7
Current Account Balance (USD bn)-31.0-24.0-29.8-23.3-19.4
Trade Balance (USD billion)-1.2-3.1-14.7-13.1-11.0
Exports (USD billion)380397381374119
Imports (USD billion)381110395387420
Exports (annual variation in %)2.54.4-4.1-1.79.5
Imports (annual variation in %)2.84.9-1.2-2.18.6
International Reserves (USD)177193177177173
External Debt (% of GDP)31.132.635.838.538.0

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Mexico Facts

Bond Yield8.05-0.24 %Mar 11
Exchange Rate19.11-0.29 %Mar 11
Stock Market41,8760.12 %Mar 11

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