Mexico Economic Forecast

Mexico Economic Outlook

February 12, 2019

Preliminary GDP figures revealed that growth slid sharply in the final quarter of 2018, weighed on by a contraction in the industrial sector. Slumping construction activity and plunging mining output drove the downturn, while services growth held up relatively well. Although a breakdown by expenditure is not yet available for the quarter, the external sector is likely to have been hurt by more tepid demand, while domestic policy uncertainty likely continued to bruise business sentiment and contain investment. Meanwhile, available data for the start of the year is mixed. The manufacturing PMI edged up in January but continued to point to contraction in the industrial sector, while consumer confidence jumped in the same month. In addition, widespread reports of gasoline shortages at the start of the year likely hampered activity in January. The shortages came after the government closed several gas pipelines to combat gasoline theft, which is a priority for new president Andrés Manuel López Obrador.

Mexico Economic Growth

FocusEconomics analysts chopped Mexico’s growth outlook this month and now see GDP expanding 1.9% in 2019, down 0.1 percentage points from last month’s forecast and a touch below last year’s 2.0% increase. A deceleration in the U.S. economy will reduce demand for Mexican exports while continued uncertainty over the new government’s policy and the ratification of USMCA agreement also dampen the outlook. Next year, growth is seen edging up slightly to 2.0%.

Mexico Economy Data

Population (million)118120121122124
GDP per capita (USD)10,77310,9649,6548,8049,325
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)40.042.646.648.746.2
Money (annual variation in %)10.711.
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)380397381374409
Imports (USD billion)381400395387420
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 Yield8.42-0.24 %Feb 14
Exchange Rate19.26-0.29 %Feb 14
Stock Market42,7250.12 %Feb 14

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