Mexico Economic Forecast

Mexico Economic Outlook

June 11, 2019

Mexico’s economy stumbled into the new year, tripping on a series of one-off industrial- and services-sector shocks in the first quarter. Moreover, across-the-board uncertainty hampered activity as trade-related anxieties and policy ambiguity at the outset of AMLO’s presidency rattled manufacturing and public-sector services, respectively. Second-quarter indicators, meanwhile, have fared little better. Deteriorating consumer confidence and an uptick in the unemployment rate suggest modest gains in household spending, while downbeat survey-based data point to the further pullback of fixed investment and shakier export growth. On 7 June, U.S. President Donald Trump suspended the so-called immigration tariffs that were set to be levied on Mexican imports as of 11 June. The damage had already been done, however; two of the three credit-rating agencies issued warnings amid mounting concerns over state-owned Pemex and aggravated downside risks to growth.

Mexico Economic Growth

U.S. tariffs, if imposed, would devastate the economy. Moreover, the unfolding diplomatic crisis has already shaken USMCA-related certainty and frightened investors. Policy uncertainty in light of AMLO’s nascent presidency and flagging oil and gas output, meanwhile, are also expected to weigh on growth this year. Amid unraveling Mexico-U.S. trade relations, Met the why particular analysts lowered their growth forecasts in June. As such, they now see growth at 1.5% this year, which is down 0.2 percentage points from May’s forecast, and at 1.8% in 2020.

Mexico Economy Data

20132014201520162017
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 %)1.42.83.32.92.0
Domestic Demand (annual variation in %)1.41.92.82.82.9
Consumption (annual variation in %)1.82.13.43.73.0
Investment (annual variation in %)-3.43.15.01.1-1.5
Industrial Production (annual variation in %)-0.22.61.20.4-0.6
Retail Sales (annual variation in %)1.12.75.18.71.3
Unemployment Rate4.33.84.03.43.1
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 %)11.711.45.26.88.2
Inflation Rate (CPI, annual variation in %, eop)4.04.12.13.46.8
Inflation Rate (CPI, annual variation in %)3.84.02.72.86.0
Inflation (PPI, annual variation in %)1.30.91.311.35.2
Policy Interest Rate (%)3.503.003.255.757.25
Stock Market (annual variation in %)-2.21.0-0.46.28.1
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

ValueChangeDate
Bond Yield7.67-0.24 %Jun 13
Exchange Rate19.20-0.29 %Jun 13
Stock Market43,4830.12 %Jun 13

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