Thursday , April 22 2021

Santander to an estimated 1.8% growth forecast for Mexico in 2019 | AméricaEconomía



Mexico City. The Santander financial group reported on Monday that it cut its forecast for Mexico's economic growth in 2019, ranging from 2.3% to 1.8%.

However, the financial institution maintained its estimate of GDP growth by 2.1% this year, according to a report to its customers.

The Mexican Entity of the Spanish Bank also anticipated that the Central Bank of Mexico (Banxico) could raise the key interest rate before the end of the year, as a result of recent Mexican currency losses against the dollar.

"We estimate that the depreciation of the peso will cause Banxico to respond with an increase of 25 basis points in November, in our opinion," the entity estimated.

With regard to inflation projections, the financial group projected levels of 4.6% and 4% by the end of 2018 and 2019 respectively. Banxico has a permanent inflation target of 3%

In this way, the target rate would be 8% at the end of 2018, a level that would remain until the end of next year, according to Santander.

The Mexican peso, which in recent days has entered a new volatility period, would close the year at levels of 19.8 units per dollar and 19.5 in 2019.

With regard to inflation projections, the financial group projected levels of 4.6% and 4% by the end of 2018 and 2019, respectively.

Banxico has a permanent inflation target of 3%, with a difference of one percentage point up and down.

According to the latest official data, Mexico's inflation was 4.94% by the first half of October at the inter-annual rate.

The price index ended in 2017 at 6.77%, the highest level in the last 16 years.

Until this year, Banxico raised its target rate twice in an attempt to curb inflationary pressures in a period of sluggish economic expansion.

In 2017, Mexico's GDP grew by 2%, whose economy, the second largest in Latin America after Brazil, largely depends on the productive cycles of the United States, being its main business partner.


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