Banks, brokerages gloomy about Mexico’s growth in 2020

Seven banks and brokerages are predicting economic growth of less than 1% in 2020, a new survey shows.

Conducted by economic analysis and forecasting firm FocusEconomics, the survey indicates that Germany’s Commerzbank and Swiss investment bank UBS anticipate 0.9% GDP growth next year.

British bank Standard Chartered, Mexican foreign exchange company Monex and Mexican financial services firm Invex all predict 0.8% growth, while U.S. firm DuckerFrontier is forecasting an economic expansion of just 0.4%.

The most pessimistic outlook comes from the French investment bank Société Générale, which sees zero growth in 2020.

Thirty-five other entities surveyed by FocusEconomics predict growth of 1% or higher next year. The most optimistic outlook came from Germany’s DekaBank, which forecasts 1.8% growth next year.

The American Chamber of Commerce in Mexico predicts a GDP expansion of 1.7%, while the Mexican firms Actinver and GBM Securities both anticipate 1.6% growth. The average forecast of the 42 entities consulted was 1.2%.

Joel Virgen, BNP Paribas’ chief economist for Mexico, told the newspaper El Economista that the French bank is forecasting 0.6% growth in 2020.

He said the bank is still waiting for further details about the National Infrastructure Plan before predicting what impact it will have on the economy.

Virgen said that the economy will face a range of internal risks related to government policy in 2020 as well as external ones such as uncertainty about the new North American free trade agreement.

The forecasts for the economy in 2020 come the week after revised data from the national statistics agency, Inegi, showed that Mexico entered a light recession in the first half of this year.

The economy contracted in both the first and second quarters and grew by just 0.01% in the third, Inegi said.

Meanwhile, the Finance Secretariat’s 2020 economic package anticipates 2% growth next year while the Bank of México’s forecast is a growth rate between 1.5% and 2.5%.

Despite the weak economy, business magnate Carlos Slim last week endorsed the economic performance of President López Obrador and his government, claiming that the foundations have been laid for greater investment and growth in coming years.

Source: El Economista (sp) 

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