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.

  • The passage of energy sector reform 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 3.1% to 2.8% as weak oil exports weigh on trade dynamics and the impact of rates hikes coupled with elevated inflation eat into consumer spending.

  • We have revised down our 2016 forecast for the Mexican peso, from MXN16.20/USD to MXN17.50/USD. Increased global risk aversion given tighter global liquidity conditions and rising market fears of a disorderly slowdown in China will weigh on the peso. Coupled with a sharper than expected drop in oil prices - which will cool export growth and undermine investor sentiment toward the oil producing economy - this underpins our view that the peso will be vulnerable to sharp sell-offs in the months ahead.

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 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 2.1 2.4 3.1 3.5
Nominal GDP, USDbn 1,304.4 1,147.4 1,198.9 1,319.2
Consumer price inflation, % y-o-y, eop 4.1 2.5 3.9 3.8
Exchange rate MXN/USD, eop 14.75 16.70 15.90 15.25
Budget balance, % of GDP -3.1 -3.5 -3.1 -2.8
Current account balance, % of GDP -1.9 -2.6 -3.2 -2.3
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Key Risks To Outlook
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics
8
Risk Of Public Unrest Will Remain Elevated
8
TABLE: POLITICAL OVERVIEW
8
Long-Term Political Outlook
10
Security And Corruption To Remain Key Risks
10
Chapter 2: Economic Outlook
13
SWOT Analysis
13
BMI Economic Risk Index
13
Economic Activity
14
Extractive Sector Slowdown Will Temper Economic Gains
14
GDP By Expenditure Outlook
15
TABLE: PRIVATE CONSUMPTION FORECASTS
15
TABLE: GOVERNMENT CONSUMPTION FORECASTS
15
TABLE: FIXED INVESTMENT FORECASTS
16
TABLE: NET EXPORTS FORECASTS
16
Balance Of Payments
16
Current Account Deficit Will Widen Amid Rising Interest Rates
16
Outlook On External Position
17
TABLE: FINANCIAL ACCOUNT
18
TABLE: CURRENT ACCOUNT
19
Fiscal Policy
20
Spending Cuts Will Drive Greater Fiscal Consolidation
20
TABLE: FISCAL POLICY
20
Monetary Policy
22
Tightening Will Start In 2015, Accelerate In 2016
22
TABLE: BANXICO & FEDERAL RESERVE UPCOMING MEETING DATES
22
TABLE: MONETARY POLICY
23
Currency Forecast
24
MXN: Bearish Market Coming To An End
24
TABLE: BMI CURRENCY FORECAST
24
TABLE: EXCHANGE RATE
25
Chapter 3: 10-Year Forecast
27
The Mexican Economy To 2024
27
Stronger Growth Ahead Following The Passage Of Key Reforms
27
TABLE: LONG-TERM MACROECONOMIC FORECASTS
27
Chapter 4: Operational Risk
31
SWOT Analysis
31
Operational Risk Index
31
Operational Risk
32
TABLE: OPERATIONAL RISK
32
Education
33
TABLE: LATIN AMERICA - EDUCATION RISK
34
TABLE: GRADUATES OF TERTIARY EDUCATION, 2005-2012
35
Government Intervention
38
TABLE: LATIN AMERICA - GOVERNMENT INTERVENTION RISK
39
TABLE: PERSONAL INCOME TAX BRACKETS
40
Chapter 5: BMI Global Macro Outlook
43
Global Outlook
43
Global Growth Weak As EMs Squeezed
43
TABLE: GLOBAL ASSUMPTIONS
43
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
44
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
44
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
45

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.

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  • Delivery of the report in print, PDF and online formats
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
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  • 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