If the generalized 25% tariff is maintained throughout the year, this will produce a contraction of the Gross Domestic Product (GDP) of around 1.5%, estimated the director of Economic Analysis for Latin America in Moody’s Analytics, Alfredo Coutiño.
The impact on Mexico results from the fact that Mexican exports represent almost 40% of GDP and 84% of them go to the United States market, he said.
Thus, economic growth would go from 1.3% in 2024 to a drop of around 1.5% in 2025, he stressed.
According to the strategist, these forecasts are preliminary and were made with a model of product elasticity with respect to US tariffs. This model indicates that each 10% rate on Mexican exports produces a reduction of approximately a percentage point of the product, he stressed.
Interviewed by the economist, he warned that “before an aggressively adverse environment for both the exchange rate and for the inflation, Banco de México must act with prudence and privilege his inflationary mandate.”
This means that the decision of February 6 will have to keep the interest rate in 10%, where it has been located since December, to send a credibility message with its unique inflationary mandate.
“If you start cutting not only 50 points but even 25, you would send a message of little credibility with your unique mandate and confirm that it privileges the economic quotient before price stability. That is, a dual mandate in practice although a single theory is defended. ”
Moody´s Analytics is the area of economic research of the qualifier and its investigations have no impact on the sovereign note of Mexico that is found in “BBB/negative perspective”. This sovereign rating indicates that Mexico’s credit profile is two levels above the investment grade, but at risk of a decalification cut.
With this opinion, there are three economic research teams that anticipate a contraction in Mexico’s GDP if the United States maintains 25% tariffs on all products that trade throughout the year.
Since Thursday, January 30, the HR Ratings research team warned the risk of recession in the event that tariffs were confirmed and Friday, S&P Market Intelligence also acknowledged that a GDP contraction would come.
