Despite lower oil prices and softer external demand, GDP growth is expected to strengthen to 3% in 2017, reflecting the structural reforms implemented by the government. The depreciation of the peso reinforced gains in Mexican export market share and resilient domestic demand continues to support economic activity.
Monetary policy remains focused on achieving inflation stability and avoiding upward price pressures from currency weakness, with interest rates kept above underlying inflation. Public-sector spending cuts are being implemented following the sharp reduction in oil-related government revenues. The government is also taking measures to ensure the financial viability of the state oil company PEMEX.
While productivity growth has been weak over the past few years, there are signs of a pick-up. Key structural reforms, notably measures to foster competition in network industries and to facilitate access to credit, are expected to bolster business-sector capital formation and productivity. However, full implementation of reforms is essential, and a renewed push may be needed to fight informality and to boost anti-corruption efforts.
Economic Survey of Mexico (survey page)
The Economic Consequences of Brexit: A Taxing Decision (main web page with paper)
Structural reforms in a difficult time (blog + paper)
Public spending efficiency in the OECD (blog + paper)