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Home > Country Profiles > Mexico

Country Profiles

Financial Outlook

The recognition of Mexico as a predictable and prudently managed economy, with market-friendly and transparent regulations for foreign investment and open and liquid financial markets, has encouraged large foreign investment inflows in recent years. Mexico’s economy underperformed in 2013, with real GDP growth for the year expected to fall to 1.2% from 3.6% in 2012. The actual figures for 2013 could be worse if the large drop in the first half of the year is not counterbalanced by a strong rebound in the final two quarters of the year according to the IMF. The slack in the economy helped to curtail inflation, which fell to 3.5%, near to the government’s 3% target rate. The public sector borrowing requirement for 2014 is expected to be 4.1% of GDP, amounting to a considerable fiscal stimulus. The central bank has eased monetary policy to help the economy, cutting the policy rate by 100 basis points (1%) to 3.5%. Mexico saw some adverse impact when the US Federal Reserve began talking about tapering off its quantitative easing program in May 2013, so tapering still stands as a potential headwind in 2014.

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Further reading on Mexico

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