Mexico Economic Forecast

Mexico Economic Outlook

September 13, 2016

Newly appointed Finance Minister José Antonio Meade presented the 2017 draft budget to Congress on 8 September. The message is clear: the government is willing to cut spending as much as necessary to consolidate Mexico’s weak fiscal position. It has proposed reducing the fiscal deficit from an expected 2.9% of GDP this year to 2.4% of GDP in 2017 and targets a primary surplus of 0.4% of GDP. To do so, it envisages a significant decrease in public spending. While the markets welcomed the proposed budget, risks of political turmoil have increased following the sudden resignation of former Finance Minister Luis Videgaray. Videgaray’s resignation represents the most high-profile casualty of the recent visit by the Republican candidate for the U.S. presidency Donald Trump and leaves President Enrique Peña Nieto without his most trusted advisor.

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Mexico Facts

ValueChangeDate
Bond Yield6.02-0.50 %Sep 29
Exchange Rate19.520.80 %Sep 29
Stock Market47,672-0.78 %Sep 29

Mexico Economic Growth

September 13, 2016

Indications that economic activity will slow in the second half of the year and that it could be exacerbated by policy tightening—both fiscal and monetary—prompted analysts to lower Mexico’s growth outlook. Forecasters expect the economy to expand 2.1% this year, which is down 0.2 percentage points from last month’s forecast. Next year, the economy is projected to increase 2.5%.

Mexico Economic News

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