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AICEP
Agência para o Investimento e Comércio Externo de Portugal

CABEÇALHO

Mexico’s economy stumbled into the new year, tripping on a series of one-off industrial- and services-sector shocks in the first quarter.

Moreover, across-the-board uncertainty hampered activity as trade-related anxieties and policy ambiguity at the outset of AMLO’s presidency rattled manufacturing and public-sector services, respectively. Second-quarter indicators, meanwhile, have fared little better. Deteriorating consumer confidence and an uptick in the unemployment rate suggest modest gains in household spending, while downbeat survey-based data point to the further pullback of fixed investment and shakier export growth. On 7 June, U.S. President Donald Trump suspended the so-called immigration tariffs that were set to be levied on Mexican imports as of 10 June. The damage had already been done, however; two of the three credit-rating agencies issued warnings amid mounting concerns over state-owned Pemex and aggravated downside risks to growth.
 
Mexico Economic Growth
U.S. tariffs, if imposed, would devastate the economy. Moreover, the unfolding diplomatic crisis has already shaken USMCA-related certainty and frightened investors. Policy uncertainty in light of AMLO’s nascent presidency and flagging oil and gas output, meanwhile, are also expected to weigh on growth this year. Amid unraveling Mexico-U.S. trade relations, FocusEconomics analysts lowered their growth forecasts in June. As such, they now see growth at 1.5% this year, which is down 0.2 percentage points from May’s forecast, and at 1.8% in 2020.
 
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