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 substantially in the year ahead.

  • We have revised our policy rate forecast after a surprise 50 basis point hike in February. We now expect the policy rate will end the year at 4.25%. Slow growth will temper appetite for monetary tightening by Banxico in the near term. However, as the US Federal Reserve begins to raise the fed funds rate in H216, Mexico will likely follow suit in a bid to maintain the interest rate differential with the US and defend against short-term capital outflows.

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
Nominal GDP, USDbn 1,304.7 1,152.6 1,096.6 1,230.8
Real GDP growth, % y-o-y 2.3 2.5 2.6 3.0
Consumer price inflation, % y-o-y, eop 4.1 2.1 3.5 3.8
Exchange rate MXN/USD, eop 14.75 17.23 17.20 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
10
TABLE: PRIVATE CONSUMPTION FORECASTS
10
TABLE: GOVERNMENT CONSUMPTION FORECASTS
10
TABLE: FIXED INVESTMENT FORECASTS
10
Fiscal And Public Debt Outlook
11
Structural Reforms Will Narrow Deficit
11
TABLE: NET EXPORTS FORECASTS
11
Structural Fiscal Position
12
TABLE: MAIN SOURCES OF FEDERAL REVENUE & EXPENDITURE
12
External Trade And Investment Outlook
14
FDI Will Provide External Account Stability
14
Outlook On External Position
15
TABLE: TOP FIVE GOODS EXPORTS IN 2014
15
TABLE: TOP FIVE GOODS IMPORTS IN 2014
15
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
16
Monetary Policy
17
Tightening Will Continue In 2016
17
Monetary Policy Framework
18
Currency Forecast
20
MXN: Bearish Market Sentiment Will Weigh On Peso
20
TABLE: BMI CURRENCY FORECAST
20
Chapter 2: 10-Year Forecast
23
The Mexican Economy To 2025
23
Stronger Growth Ahead Following The Passage Of Key Reforms
23
TABLE: LONG-TERM MACROECONOMIC FORECASTS
23
Chapter 3: Political Outlook
27
SWOT Analysis
27
BMI Political Risk Index
27
Domestic Politics
28
Investor-Friendly Legislation Will Be Undeterred By Social Unrest
28
TABLE: POLITICAL OVERVIEW
28
Long-Term Political Outlook
30
Security And Corruption To Remain Key Risks
30
Chapter 4: Operational Risk
33
SWOT Analysis
33
Operational Risk Index
33
Operational Risk
34
TABLE: OPERATIONAL RISK
34
Trade Procedures And Governance
35
TABLE: EXPORT AND IMPORT DOCUMENTS
35
TABLE: TRADE PROCEDURES BREAKDOWN
35
TABLE: LATIN AMERICA - TRADE PROCEDURES AND GOVERNANCE
36
Vulnerability To Crime
37
Chapter 5: BMI Global Macro Outlook
41
Global Macro Outlook
41
Unfinished Business In 2016
41
TABLE: GLOBAL ASSUMPTIONS
41
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
42
TABLE: BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
42
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
43
TABLE: MEXICO - MACROECONOMIC DATA & FORECASTS
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 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
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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