Mexico Economic Outlook
July 12, 2016Following solid growth in Q1, Mexico’s economy is expected to have shifted to a lower gear in Q2. A lack of traction in the manufacturing sector is partly responsible for the slowdown in Q2 with no visible signs of a pick-up any time soon. Healthy consumer fundamentals—such as growing employment, rising real wages and remittances increasing at a healthy pace—continue to suggest that private consumption remained strong in Q2. However, the bad news in the manufacturing sector seems to suggest that economic growth is fragile and underlines the fact that Mexico is unable to sustain significant growth rates. Shortly after the United Kingdom announced that citizens had voted to abandon the EU, Mexico’s Ministry announced MXN 31.8 billion (USD 1.7 billion) in budget cuts in response to expected volatility resulting from Brexit. Unlike the last cut in February, this one will not affect PEMEX and will fall almost entirely on current spending, with the objective of maintaining the government’s fiscal deficit target of 3.0% of GDP this year.
Mexico Economy Data
5 years of Mexico economic forecasts for more than 30 economic indicators.
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|Bond Yield||5.96||-0.50 %||Jul 21|
|Exchange Rate||18.57||-0.56 %||Jul 21|
|Stock Market||47,365||-0.30 %||Jul 21|
Mexico Economic Growth
July 12, 2016The Consensus view among analysts is that economic growth will be supported by private consumption this year. However, Mexico’s difficult adjustment to low oil prices and the fact that monetary and fiscal tightening come at a time of softening economic activity are casting a shadow on the outlook. Analysts expect the economy to expand 2.4% this year, which is unchanged from last month’s forecast. Next year, the economy is projected to accelerate to a 2.7% expansion.
Mexico Economic News
July 8, 2016
The unadjusted index of consumer confidence elaborated by INEGI rose from 90.9 in May to 93.5 in June and overshot the 92.2 the markets had expected.
July 7, 2016
In June, consumer prices rebounded and rose 0.11% (May: -0.45% month-on-month).
July 1, 2016
Remittances from Mexican workers abroad rose in May and accelerated the pace of expansion compared to April.
July 1, 2016
The latest round of PMIs in Mexico showed that the momentum seen in Mexico’s manufacturing sector in previous months faded drastically in June.
June 30, 2016
On 30 June, Mexico’s Central Bank (Banxico) hiked the overnight interest rate for a second time this year in a bid to support the peso, which has been hit hard by the market turmoil set off by the UK’s shocking vote to leave the EU. The hefty move by Banxico to raise rates by 50 basis points, from 3.75% to 4.25% comes just days after the peso closed at its weakest level ever against the U.S.