Analysts from Moody’s Analytics, Bank of America and the risk insurer Coface estimate that the Mexican economy will register growth next year ranging from 0.6 to 0.8 percent.
These forecasts incorporate the impact that uncertainty due to the trade policies that the United States government will apply when the president-elect, Donald Trump, takes office; the effect of the fiscal consolidation measures that the Mexican government will apply, as well as the business climate that the local administration is implementing.
None of the aforementioned forecasts incorporates the effect that the application of a 25% tariff on Mexican export products to the United States could have on the Mexican economy.
Interviewed separately, strategists from each firm stated that relocation remains an expectation that can generate some positive factor for growth.
But they noted that the United States’ trade policy must be defined and the internal response strategy to the review of the agreement outlined before incorporating it as a compensatory effect to the downward forces for the growth forecast.
Moody’s Analytics sees 0.6% growth
The director of economic analysis for Latin America at Moody’s Analytics, Alfredo Coutiño, estimated that the Mexican GDP will barely achieve an advance of 0.6% next year.
He considers that the uncertainty regarding the investment of American companies in Mexico and the nervousness over the constitutional changes will be the factors that will guide the economy to a lower performance.
Just on November 25, they estimated that growth could reach 1%.
He highlighted that the Mexican government does not have fiscal space to stimulate the economy in the event of a deterioration in the commercial context, especially when assuming that it is committed to reducing the fiscal deficit incurred this year to fund social programs.
BofA and Coface converge at 0.8%
In addition, the risk insurer Coface and the global bank Bank of America agree in expecting an advance of 0.8% in growth by 2025.
The Regional Economist for North America at Coface, Marcos Carías, clarified that this forecast does not incorporate the impact that the application of 25% tariffs on Mexican products to the United States that President-elect Donald Trump warned would have.
If the threat is confirmed and Mexican diplomacy fails to dismantle the risk, the forecast would undoubtedly be a recession, he emphasized.
The expert explained that the factors that will lead the economy to an advance of just 0.8% next year are fiscal consolidation and the course of internal demand in the labor market.
Meanwhile, the Executive Director of Bank of America Mexico, Emilio Romano admitted that the growth forecast they have for the country in 2025 is 0.8 percent.
However, he clarified that the bias is upward, incorporating the favorable expectation they have for the performance of the United States.
He warned that the bank’s plan is to double its income and volume of clients in the country for the next five years due to the high potential that Mexico does have as the only country that can, along with Canada, offer certainty to supply chains.
Signs of confirmed slowdown
Just on Thursday, the Bank of Mexico released the minutes corresponding to the November monetary announcement.
There, one of the members of the Governing Board stated that “the signs of economic slowdown have been confirmed.”
However, due to the rebound observed in the third quarter of the year, “slack conditions have been relaxing more than expected and it is anticipated that the product gap will become negative in the following quarters.”
At the Bank of Mexico’s quarterly report conference, Deputy Governor Omar Mejía Castelazo agreed to explain that the output gap close to zero means that the economy is growing close to potential.
A negative gap, he added, indicates that a slowdown is coming.
In the morning, during the presentation of the Mexico Situation report, Carlos Serrano, chief economist of BBVA Mexico, said that the entity maintained its estimate of GDP growth at 1.2% for 2024 and at 1.0% for 2025.
