BofA cuts Mexico’s estimated economic growth from 2% to 1%
A clear deceleration of the United State’s economy in 2019, as well as tighter public finances of the new Mexican government, will be the negative factors that will lead Mexico’s economy to grow at a rate of 1% in 2019, according to the Bank of America Merrill Lynch (BofA).
In the presentation of his economic expectations for 2019, BofA’s chief economist, Carlos Capistrán, cut his GDP forecast from 2 to 1%, while raising his estimate for inflation marginally from 3.9 to 4% by the end of the year.
Said forecast is the lowest among financial institutions, as not too long ago, the Swiss bank, Credit Suisse, estimated Mexico’s GDP for 2019 would be of 1.2%.
“The United States is beginning to slow down and that is very important for Mexico. A year ago, it grew about 3% and now we expect 2.5%. However, there is a much stronger deceleration if we look at the quarterly data,” Capistrán explained.
In addition, he pointed out that various economies of the world are slowing down along the United States, such as China. In this sense, BofA’s chief economist explains that at least half of Mexico’s deceleration will be due to the United States, while the other half will be due to internal issues.