Economy

Mexico - Economic forecast summary (May 2014)

 

Even though the economy has faced difficulties from fitful external demand and an underperforming construction sector, a marked rebound in GDP growth is projected in 2014 and 2015. As external demand strengthens with the US recovery and the effects of fiscal stimulus start to take effect, investor confidence should return. Monetary policy has been accommodative, while the exchange rate has remained stable. Inflation expectations are well anchored, although inflation jumped briefly at the beginning of the year following tax rate hikes.

The ongoing boost to government spending is welcome to support investment, but as conditions begin to normalise, monetary accommodation and stimulus spending can be scaled back. Implementation of structural reforms in energy, finance and telecommunications should boost investment, building on the constitutional amendments of the last year. These reforms should boost productivity and potential growth going forward.

Note: All data definitions based on internationally comparable standards and may differ in specific cases from common national definitions.

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