The International Monetary Fund (IMF) cut its growth forecast for the Mexican economy, projecting that it will remain below two percent this year and 2020, due to uncertainty about the direction of the new government's policies.
In its report "Perspectives of the world economy" released on Tuesday, the international agency projected that the Mexican economy will now grow 1.6 and 1.9 percent in 2019 and 2020, respectively, a slowdown from the advance of 2.0 percent last year.
This new estimate for 2019 is lower than the 2.1 percent made in last January's report and 2.5 percent in October of last year, while the 2020 estimate is below the previous projections, of 2.2 and 2.7 percent. one hundred, respectively.
"In Mexico, growth is now projected to remain below 2.0 percent in 2019-2020, a downward revision close to 1 percentage point in both years in relation to October."
The international financial agency noted that in Mexico, market sentiment deteriorated and sovereign spreads rose when the incoming government canceled the construction of the planned airport for the capital and reversed the energy and education reforms. There is uncertainty due to the change in policy orientation carried out by the new government of Mexico.
The IMF indicated that, as in Brazil, the new projections for the Mexican economy reflect in part variations in the perceptions about the direction of policies in the new governments of both countries.
"In Mexico, where sovereign spreads have increased considerably since October, it is essential to avoid delays in the necessary structural reforms, which would generate greater uncertainty that would harm private investment and increase employment."
Continuing with the medium-term fiscal consolidation plan (and perhaps seeking an even greater reduction in the deficit) would stabilize public debt, improve confidence and create space to respond to shocks and meet the needs of spending related to the aging of the population. As long as inflation remains moderate and expectations are well anchored, monetary policy can remain accommodative, with a margin to cut rates if necessary.
Just last week, the Ministry of Finance and Public Credit (SHCP) also lowered its growth forecasts for the Mexican economy to a range between 1.1 and 2.1 percent in 2019, as well as between 1.4 and 2.4 percent in 2020.
According to the document known as "Pre-Criteria" of economic policy, these new estimates are less than between 1.5 and 2.5 percent in 2019 and between 2.1 and 3.1 percent by 2020, considered in the General Criteria of Economic Policy (CGPE) approved last December, within the economic package for 2019.
For the world economy, the IMF projected that growth will slow from 3.6 percent in 2018 to 3.3 percent in 2019, lower by 0.2 points compared to last January's estimate, to return to 3.6 percent in 2020.
The new estimate of the financial institution for Latin America is of growth of 1.4 and 2.4 percent in this year and in 2020, lower by 0.6 and 0.1 points to the projections of last January.