OECD's interim growth outlook, published today. OECD's interim growth outlook, published today.

OECD raises outlook for Mexico growth

Forecast is for 2.5% this year and 2.8% in 2019, up 0.3% and 0.5% from November

The Organization for Economic Co-Operation and Development (OECD) has upgraded its growth forecasts for the Mexican economy for both this year and next.


In its Interim Economic Outlook released today, the OECD said that Mexico’s gross domestic product (GDP) will grow by 2.5% this year and 2.8% in 2019.

The figures represent a 0.3% and 0.5% increase respectively on OECD November numbers.

“Growth in the United States, Germany, France, Mexico, Turkey and South Africa is projected to be significantly more robust than previously anticipated, with smaller upward revisions in most other G20 economies,” the outlook said.

Referring specifically to Mexico, the 35-member economic organization said that “fiscal and monetary policies are relatively tight, but strong global demand growth, resilient private consumption and reconstruction spending are all projected to support output growth in 2018-19.”

The report also said that inflation is set to rise modestly across OECD countries and included Mexico among three countries where “past currency declines and a relatively strong sensitivity to commodity price fluctuations are currently adding to inflation pressures.”


However, if inflationary pressures subside, the OECD suggested that it may be possible for Mexico to ease interest rates, which are currently set at 7.50%.

The higher projected growth figures come despite continuing uncertainty surrounding the outcome of negotiations to modernize the North American Free Trade Agreement (NAFTA).

United States President Donald Trump last week announced that Mexico will be initially exempt from new tariffs on steel and aluminum imports but framed the concession as conditional on reaching an updated NAFTA agreement that better favors the U.S. It is still unclear whether the exemption will be made permanent.

Despite fears that the new protectionist measures could trigger a trade war, the OECD still projected that the world economy will continue to strengthen in 2018 and 2019.

Global growth of 4% is expected this year, a 0.3% increase on last year.

Source: Milenio (sp)

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  • Mike S

    These are solid numbers for Mexico. US GDP growth rate was 3% in 2015, 1.5% in 2016, 2.3% in 2017, and is projected to be 2.8% in 2018. There was a global recession between 2008 and 2014. Now we are experiencing one of the rare times when almost all world major economic zones are growing. Trump inherited a solid and growing economy from Obama unlike what Bush handed off to him. Trump’s huge tax break to corporations and the 1% along with diminishing Big Bank and Wall Street supervision, gutting the EPA, and gutting Obamacare should pay off in decent economic growth for next 2 years. After that the wheels will come off as they always do with “trickle down” economics. Lets hope it is not as bad as 2008. Inflation and rising interest rates are looming for both countries. All bets are off if Trump starts trade wars and revokes NAFTA. The red ink is flowing heavily now in Washington during “good economic times” which is a recipe for disaster long-term. Mexican federal deficits are well under control.

    • WestCoastHwy

      Mike S…..the Economics Professor…..NOT!

    • Güerito

      Mike, Mexico is a developing country. It’s incorrect to compare growth rates in Europe or the US with those of developing countries, most of which have no social safety net, etc.

      Mexico should be comparing its growth rate with other developing countries, such as China and India – both growing over 6% per year. Indonesia and Turkey are both growing around 5%. Mexico was richer than S. Korea just a generation ago, now S. Korea is established as a developed country.

      The bottom line is that 3% growth is the bare minimum needed for Mexico just to create sufficient new jobs for those entering the workforce. Mexico is not even doing that. The much touted “reforms” enacted in EPN’s first two years were supposed to have the Mexican economy growing above 5% by now.

      • Mike S

        “Gross domestic product is the best way to measure a country’s economy. GDP is the total value of everything produced by all the people and companies in the country. It doesn’t matter if they are citizens or foreign-owned companies. If they are located within the country’s boundaries, the government counts their production as GDP”

        What I’m taking about here is the RATE of GDP increase which is comparable between wealthy and poor countries. Of course the per-capita GDP is much higher in the US than Mexico. How a country taxes its GDP and what it uses those taxes for is another discussion. I think it is difficult to compare much older and intact societies such as S. Korea and Turkey with Mexico. Mexico was “conquered” and fully raped, pillaged, and plundered economically, culturally, and religiously by Europe and the Catholic Church.The US pumped vast money into S. Korea for 3 decades until it took off as an Asian tiger. It as a bulwark against Communist China and we built up their private sector as an example of “Western capitalism” to Asia. You don’t see that in Vietnam/Cambodia/Laos/Thailand/Burma which are all poorer than Mexico. Mexico is a great country with wonderful people and culture despite the drug wars. They usually rate in the top 4 “happiest” countries each year…a testament to their good nature and family values.

        • Güerito

          My response discusses the RATE of GDP growth in developing countries, and Mexico falls way behind the countries I mentioned.

          As for the developing countries in S.E. Asia you mention, all of them except Thailand are currently growing in the 6 – 7% range:

          Vietnam – 7%; Cambodia – 7%; Laos – 6%; Myanmar – 6%. Only Thailand, undergoing a lot of political turmoil lately, is growing below this range, around 1% per year.

          You seemed to have completely missed my point about the error in comparing rates of GDP growth between developed and developing countries. Simply put, developing countries are starting from far behind, so it’s expected that the economy in a developing country will have higher rates of growth than that seen in developed countries.

          • Mike S

            I agree with your point about poorer countries likely to have higher GDP growth rates but poorer countries also have wider swings up and down with GDP rates so maybe a 10 year average would be a better measure for them. Also, how the rewards of growing GDP are shared among its citizens is important. In the US almost all economic gains the last 20 years have gone to the 1%. Mexico too but not as bad. The quality of life for the lower one third of Americans is lower in my opinion than the middle one third of Mexicans even though Americans are able to afford more Chinese junk than Mexicans. The poverty of the lower 20% of Mexicans is a real problem for Mexico, but the middle class is slowly growing and high birth rates are declining. I didn’t mean to lecture you about Mexican culture…those comments were meant for some of the Fox Nation Trumpeters who post a lot here. Everybody who is not Mexican has different experiences with Mexico and Mexicans. Mine fortunately have been quite favorable and I hate people who negatively stereotype and don’t really know what they are talking about. Both countries have plenty of problems that need constructive criticism and co-operation. We are on this “North American” ship together and insults and a wall is the wrong way to go.

  • WestCoastHwy

    OECD is about as valid as a 3 dollar bill.

    • daniel pugh

      As are your constant negative comments.

      • WestCoastHwy

        U R constantly ?