Thursday , October 21 2021

AMLO, the risk of starting with the wrong foot: FocusEconomics



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On the verge of assuming the position of the president of Mexico, Andres Manuel Lopez Obrador "risks running the administration at the wrong rate, with outflows of capital, a fall in the peso and a possible decrease in expectations," explains FocusEconomics consultant.

The firm takes a sample revision of the negative perspectives on the sovereign note of Mexico by Fitch, to note that "the old façade of the elected president seems to disappear, which seemed to be a friend on the market."

In Latinfocus Consensus Projections for November, average growth forecasts for 2018 and 2019 were unchanged, to 2.2% respectively.

They emphasize shades and give voice to one of the consulted panelists: Alekis Milo, chief economist at HSBC, who warns of "obstacles in the transition to the continuity of some projects."

"We expect economic activities to continue to accelerate in the coming quarters, but the transition between the two administrations has a tendency to face obstacles, such as the continuity of some projects, which will lead to administrative inefficiency and lead to the beginning of 2019 with significant challenges ", Says the strategist.

"For now we expect an economy that will continue to expand, in a healthy dynamics for the next quarters," he explains, "but we expect an increase in insecurity in domestic factors that will impose important challenges."

In the details of the information, three brokerage houses and consulting companies have reduced economic expansion forecasts, and the cuts were offset by an increase in the GDP forecast from six brokerage houses.

For growth expectations from 2019, the Goldman Sachs forecast was the most optimistic, estimating an expansion of 2.8 percent. By contrast, the US Chamber predicts a GDP of 1.5 percent.

FIRST VIEW OF 2020

As FocusEconomics usually does, the November report asks if they already have a forecast in two years from now. As a result of this exercise, 15 of the 42 consulted teams abstained from publishing the forecast.

The consensus forecast, from those who replied, envisages the expansion of the economy by 2.4 percent.

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