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
Growth To Modestly Accelerate, Despite External Headwinds
8
GDP By Expenditure Outlook
9
TABLE: GDP GROWTH FORECASTS
9
TABLE: PRIVATE CONSUMPTION FORECASTS
9
TABLE: GOVERNMENT CONSUMPTION FORECASTS
9
Fiscal Policy And Public Debt Outlook
10
TABLE: FIXED INVESTMENT FORECASTS
10
TABLE: NET EXPORTS FORECASTS
10
Structural Fiscal Position
12
TABLE: MAIN SOURCES OF FEDERAL REVENUE & EXPENDITURE
12
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
13
Balance Of Payments
14
Deficit Will Narrow After 2016 Amid Stronger US Demand
14
Outlook On External Position
16
TABLE: TOP 5 GOODS EXPORTS IN 2015
16
TABLE: TOP 5 GOODS IMPORTS IN 2015
16
TABLE: CAPITAL & FINANCIAL ACCOUNT BALANCE
17
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
17
Monetary Policy
18
Aggressive Hike Underscores Peso's Centrality To Monetary Policy
18
Monetary Policy Framework
19
TABLE: MONETARY POLICY FORECASTS
19
Currency Forecast
21
MXN: Banxico Will Offset Rising External Headwinds
21
TABLE: BMI CURRENCY FORECAST
21
Chapter 2: 10-Year Forecast
23
The Mexico 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
Local Elections Signal An Uphill Climb For The PRI
28
TABLE: POLITICAL OVERVIEW
28
Long-Term Political Outlook
29
Security And Corruption To Remain Key Risks
29
Chapter 4: Operational Risk
33
SWOT Analysis
33
Operational Risk Index
33
Operational Risk
34
TABLE: OPERATIONAL RISK
34
TABLE: LATIN AMERICA - MARKET SIZE AND UTILITIES RISK
36
Labour Costs
39
TABLE: REGULATIONS GOVERNING FLEXIBILITY OF WORKFORCE
40
Chapter 5:BMI Global Macro Outlook
43
Global Macro Outlook
43
Brexit Risk Casts A Long Shadow
43
TABLE: GLOBAL ASSUMPTIONS
43
TABLE: DEVELOPED STATES, REAL GDP GROWTH, %
44
TABLE: EMERGING MARKETS, REAL GDP GROWTH, %
45
MACROECONOMIC FORECAST
47
TABLE: MACROECONOMIC DATA & FORECASTS
47

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