Markets tone down their pessimism regarding Mexican economy in 2020

Consensus among specialists in the private sector appears to stop the cuts to the economic forecasts for this year in Mexico, or at least that is what the September survey conducted by Mexico's Central Bank (Banxico) shows, which estimates a drop of 9.82%.

This is the first time since the beginning of the pandemic that the consensus does not reflect cutbacks in its analysis. On the contrary, this projection is slightly lower than that of a month earlier, when the consensus saw a drop of 9.97%, still below more pessimistic forecasts that point to a collapse that could exceed 10% by 2020.

In addition, projections for 2021 were improved, since for September a 3.26% growth in the Gross Domestic Product (GDP) was considered, contrasting with the 3.01% that had been calculated during August. In any case, both forecasts are still far from the government's projections, which estimate a drop of 8% this year and a growth of 4.6 by 2021.

As for inflation, analysts anticipate that it will close at 3.89% this year and 3.57% the following year, while the exchange rate will be 22.14 at the end of 2021 and 22.33 pesos per dollar in 2021.

At the same time that the pessimism regarding the economic direction has moderated, the same is true of the outlook for the investment environment. Thus, this month the percentage of specialists who predict that the business climate will improve in the next 6 months increased.

With regard to the current situation there is still an adverse context according to 80% of those interviewed, although 6% already considers the opposite, according to the survey released on Thursday.