Mexico Economic Outlook
August 6, 2019A preliminary estimate revealed that GDP contracted for the first time since the 2009 economic crisis in Q2, dragged down by a broad-based deterioration across the major sectors. Notably, industrial-sector output fell sharply amid the ailing construction and oil and gas sectors, while the services segment logged only paltry growth. That said, in what came to a surprise to market analysts, the economy managed to avoid slipping into a technical recession as output rebounded, albeit marginally, on a quarterly basis. Meanwhile, in mid-July, the government unveiled a new business plan for the heavily indebted, state-owned oil firm Pemex to revamp production capacity, which includes tax breaks and a capital injection of over USD 7 billion. Nevertheless, the plan was met with skepticism among investors due to concerns over its effectiveness, limited private-sector involvement and impact on fiscal sustainability, which could place the company, and the sovereign, at risk of further credit rating downgrades.
Mexico Economic GrowthGrowth is projected to ease sharply this year, mainly due to softer domestic demand. Cuts to government spending, tight monetary conditions, economic policy uncertainty and weakening confidence are set to weigh on both investment activity and private consumption. A reignition of trade tensions with the U.S. and concerns over fiscal discipline cloud the outlook. FocusEconomics panelists expect growth of 1.1% in 2019, which is down 0.2 percentage points from last month’s forecast, and 1.7% in 2020.
Mexico Economy Data
5 years of Mexico economic forecasts for more than 30 economic indicators.
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|Bond Yield||7.51||-0.24 %||Jul 31|
|Exchange Rate||19.13||-0.29 %||Jul 31|
|Stock Market||40,863||0.12 %||Jul 31|
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Mexico Economic News
August 15, 2019
At its 15 August meeting, the Governing Board of the Bank of Mexico (Banxico) voted to lower the target for the overnight interbank interest rate by 25 basis points to 8.00%, marking the first rate cut since June 2014 and ending a tightening cycle which started in December 2015.
August 8, 2019
Consumer prices rose 0.38% from a month earlier in July, following the 0.06% month-on-month increase in June.
August 5, 2019
Consumer confidence fell for the fifth consecutive month in July, with the seasonally-adjusted consumer confidence index published by the Statistical Institute (INEGI) coming in at 104.3 points, down from 106.0 points in June.
August 1, 2019
Operating conditions in the manufacturing sector continued to deteriorate in July, albeit to a lesser extent than in June.
August 1, 2019
Remittances totaled USD 3.1 billion in June (May: USD 3.2 billion), a 0.7% drop from the same month a year ago (May: +1.4% year-on-year).