Mexico Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
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Mexico Country Risk Report
Product Price
$1,195.00

Core Views

  • We remain optimistic toward Mexico's long-term growth outlook on the back of a booming manufacturing sector, an increasingly strong private consumer and favourable demographics.

  • Energy sector and other structural reforms will bolster sentiment towards Mexican assets and contribute to stronger real GDP growth in the coming years.

Major Forecast Changes

  • We have revised down our 2016 real GDP growth estimate from 2.8% to 2.6% as greater-than-anticipated fiscal and monetary tightening look poised to weigh on growth through the remainder of the year.

  • We have revised our policy rate forecast after a surprise 50 basis point hike in February and a further 50 basis point hike in June . We now expect the policy rate will end the year at 4.75%. As we no longer expect any interest rate hikes on the part of the US Federal Reserve, Mexico will be wary of opening too wide a gap between the countries' benchmark rates.

Key Risks

  • A further drop in oil prices could temper investment excitement towards Mexico's first international deepwater oil licensing round. A disappointing bid round would weigh heavily on the long-term fixed investment outlook of the country.

  • A weakening in the US economy would weigh on real GDP growth in Mexico, through lower export growth of manufactured goods.

  • A deteriorating security environment also poses downside risk to our growth outlook, as it could drive a reversal in investor sentiment.

Macroeconomic Forecasts (Mexico 2014-2017)
Indicator 2014 2015 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 2.3 2.5 2.7 3.0
Nominal GDP, USDbn 1,304.7 1,152.2 1,094.0 1,227.9
Consumer price inflation, % y-o-y, eop 4.1 2.1 3.5 3.8
Exchange rate MXN/USD, eop 14.75 17.23 17.10 16.20
Budget balance, % of GDP -3.1 -3.5 -3.1 -2.8
Current account balance, % of GDP -1.9 -2.8 -2.9 -2.5
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks
5
Chapter 1: Economic Outlook
7
SWOT Analysis
7
BMI Economic Risk Index
7
Economic Growth Outlook
8
Oil Production Drop Will Temper Growth Rebound
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Fiscal Policy And Public Debt Outlook
11
Pemex Bailout Will Not Significantly Undermine Sovereign Credentials
11
TABLE: OUTPUT PER WORKER AT SELECT OIL PRODUCERS, 2015
11
Structural Fiscal Position
14
TABLE: MAIN SOURCES OF FEDERAL REVENUE & EXPENDITURE
14
External Trade And Investment Outlook
16
Low Oil Prices And Interest Rate Hikes Will Widen Current Account Deficit
16
Outlook On External Position
17
TABLE: TOP FIVE GOODS EXPORTS IN 2015
18
TABLE: TOP FIVE GOODS IMPORTS IN 2015
18
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
19
Monetary Policy
19
Hiking Cycle To Resume In H216
19
Monetary Policy Framework
21
Currency Forecast
22
MXN: Rising Investment Will Buoy Peso
22
TABLE: BMI CURRENCY FORECAST
22
Chapter 2: 10-Year Forecast
25
The Mexico Economy To 2025
25
Stronger Growth Ahead Following The Passage Of Key Reforms
25
TABLE: LONG-TERM MACROECONOMIC FORECASTS
25
Chapter 3: Political Outlook
29
SWOT Analysis
29
BMI Political Risk Index
29
Domestic Politics
30
Local Elections Will Slow Policy Implementation
30
TABLE: POLITICAL OVERVIEW
30
Long-Term Political Outlook
32
Security And Corruption To Remain Key Risks
32
Chapter 4: Operational Risk
35
SWOT Analysis
35
Operational Risk Index
35
Operational Risk
36
TABLE: OPERATIONAL RISK
36
Economic Openness
37
TABLE: TOP FIVE IMPORT PRODUCTS & IMPORT PARTNERS, 2010-2014, USDMN
38
TABLE: FREE TRADE AGREEMENTS
39
TABLE: FREE TRADE ZONES AND INVESTMENT INCENTIVES
40
Availability Of Labour
42
TABLE: LATIN AMERICA - AVAILABILITY OF LABOUR RISK
43
TABLE: LABOUR FORCE EMPLOYMENT BY SECTOR ('000), 2009-2013
45
TABLE: TOP 10 SOURCE COUNTRIES FOR MIGRANT WORKERS ('000)
46
Chapter 5: BMI Global Macro Outlook
47
Global Macro Outlook
47
Emerging Markets Nearing Inflexion Point
47
TABLE: GLOBAL ASSUMPTIONS
47
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
48
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
48
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
49
TABLE: MACROECONOMIC DATA & FORECASTS
51

Assess your risk exposure in Mexico with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Mexico with confidence.

Your subscription service includes:

  • Delivery of the report in print and PDF
  • Online access for 12 months
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
  • The ability to export data and graphs from the online report directly into your workflow
  • The support of a dedicated Account Manager to answer any questions you might have about your subscription
  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report