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Country Forecast Mexico Product Image

Country Forecast Mexico

  • Published: September 2013
  • Region: Mexico
  • 50 Pages
  • The Economist Intelligence Unit

The agenda of the president, Enrique Peña Nieto of the Partido Revolucionario Institucional, will continue to focus on structural reforms, but will face a difficult short-term economic outlook due to weaker domestic and external demand. GDP growth will decelerate to 1.7% in 2013 as a result, before picking up to average 3.9% per year in 2014-17 as benefits from structural reforms start to materialise. In response, the government has planned a fiscal stimulus stretching to 2016, and this will see the deficit jump to an average of 3% in 2013-14. Despite occasional spikes, inflation will remain below the 4% target ceiling set by the Banco de México (Banxico, the central bank). Monetary authorities will maintain a dovish stance, prioritising growth and peso competitiveness amid occasional bouts of volatility. The current-account deficit will average 1.6% of GDP in 2013-14 owing to weaker imports and remittances. The expected opening up of the energy and telecommunications sectors will boost foreign direct investment to 2% of GDP by 2014, but portfolio flows will be affected by the gradual tapering of global monetary stimulus.

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Country Forecast Mexico

Mexico at a glance: 2013-17
OVERVIEW
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast

Mexico--highlights: Political outlook

Mexico--highlights: Demographic outlook

Mexico--highlights: Business environment outlook

Mexico--highlights: Economic outlook

Mexico--highlights: Market opportunities

Mexico--highlights: Long-term outlook

Fact sheet

Political outlook: Political forces at a glance

Political outlook: Political stability

Political outlook: Political and institutional effectiveness
Social unrest over structural reforms looms as challenge to political stability
Social unrest over structural reforms looms as challenge to political stability
Poor governance will continue to undermine government effectiveness

Political outlook: Election watch

Political outlook: Key players to watch
Enrique Peña Nieto
Luis Videgaray Caso
Gustavo Madero
Manlio Fabio Beltrones
Marcelo Ebrard
Andrés Manuel López Obrador

Political outlook: International relations

Demographic assumptions
Educational and social welfare standards will still lag behind
Urbanisation and indigenous exclusion are major social challenges
Downward trend in migration to the US will add pressure to the labour market

Business environment outlook: Business environment rankings
Business environment continues to consolidate

Business environment outlook: Mexico's business environment at a glance
Policy towards private enterprise and competition
Policy towards foreign investment
Foreign trade and exchange controls
Taxes
Financing
The labour market
Infrastructure

Business environment outlook: Macroeconomic environment
Sound macroeconomic framework is advantageous

Business environment outlook: Policy towards private enterprise and competi
Overhaul of regulation agencies to enforce competition laws
Removing red tape will be a necessity

Business environment outlook: Policy towards foreign investment
Stronger ties with Asia to support diversification

Business environment outlook: Foreign trade and exchange controls
Locational advantages to support foreign trade

Business environment outlook: Taxes
Fiscal reform will raise tax revenue

Business environment outlook: Financing
Financial reform to boost credit for SMEs

Business environment outlook: The labour market
Implementation of labour and education reforms will be challenging

Business environment outlook: Infrastructure
Continued focus on upgrading infrastructure

Economic forecast: Policy trends

Economic forecast: Fiscal policy

Economic forecast: Monetary policy

Economic forecast: International assumptions

Economic forecast: Economic growth
Reforms support medium-to-long term outlook

Economic forecast: Sectoral trends
Energy reform needed to boost oil output

Economic forecast: Inflation

Economic forecast: Exchange rates

Economic forecast: External sector

Economic forecast: Foreign direct investment in Mexico
Stocks and flows
Origin and distribution
Determinants
Impact
Potential

Market opportunities: Market outlook
Mexico will see rapid growth of the consumer market
Export-oriented manufacturing will remain a major draw for investors

Market opportunities: Consumer expenditure
High portion of income will continue to be spent on food and housing
There is huge scope for expansion of consumer credit

Market opportunities: Social indicators and living standards

Long-term outlook: The long-term outlook

Long-term outlook: Methodology for long-term forecasts
Growth projections
Definitions of variables
The independent variables include:
Summary of findings
Productivity growth

Data summary: Global outlook

Data summary: Gross domestic product, current market prices

Data summary: Gross domestic product, at constant prices

Data summary: Gross domestic product by sector of origin

Data summary: Growth and productivity

Data summary: Economic structure, income and market size

Data summary: Fiscal indicators

Data summary: Monetary indicators

Data summary: Employment, wages and prices

Data summary: Current account and terms of trade

Data summary: Foreign direct investment

Data summary: External debt

Data sources and definitions
Global data
Domestic data
Abbreviations

Guide to the business rankings model
Outline of the model
Calculating the rankings
Measurement and grading issues

Indicator scores in the business rankings model

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