Monex forecasts 1.7% growth in the Mexican economy by 2019

Financial Group Monex estimated that, during 2019, the Mexican economy will grow 1.7%, an average lower than the advance of Gross Domestic Product (GDP) of 2.1% expected at the end of 2018.

In this regard, the deputy director of Economic Analysis of Monex, Janneth Quiroz, said during a press conference that the economic projection of the country for next year will depend, first, on the public budget for 2019, which should keep the promise to continue with a fiscal surplus. She indicated that the next federal administration will have to confirm the commitment to continue with sound public finances and with the fiscal consolidation approach.

She also explained that the main factor that will drive the country’s good economic performance in 2019 is related to the United States reporting a higher economic rate than expected of around 2.4%.

The director of Strategic Analysis and Securities of Monex, Carlos Gonzalez Tabares, added that, in 2019, the economic growth of Mexico will be slower, because that is what generally happens during the first year of a new government.

“It is a learning curve period, to see what programs are opened, and then there is also the part in which investors will be more cautious until they see the economic and public policy to follow,” he said.

Specialists agree that there is a lot of nervousness in different markets and in investors due to changes in the conduction of the next federal government and in the decision making that it develops.

“Especially in the short term, attention will be focused on the public budget of 2019 and later they will observe with precision how this management of public finances will take place and how the fiscal budget is exercised through the publication of quarterly reports,” said González Tabarez.

As for the outlook of the Mexican peso to U.S. dollar exchange rate, Quiroz anticipated that at the end of 2018 it will be an average of MX$19.80 per dollar, and the same level will be maintained at the end of 2019.

Furthermore, this year’s forecast regarding general inflation is of 4.5%, while in 2019, the projection is at 4%. The Bank of Mexico (Banxico) will raise the benchmark rate by 25 basis points to place it at a level of 8% and above whose average it will remain throughout 2019, until next December, he added.

González Tabares explained that at the end of the year, the main referent of the Mexican Stock Exchange (BMV), will close at around 46,500 points, that is, it will place a loss of 7% with respect to the previous year.

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