Mexico GDP Growth Rate Surpasses Economists’ Predictions

There’s been a lot of talk on whether Mexico will finally start to grow in 2016. Recently, Mexico’s economy expanded at a faster pace than any economist projected in the third quarter, at a moderate annual rate of growth of 2.5 percent during 2015. Private consumption fueled most of the economic activity with support from stronger job creation, real wage growth, and credit expansion.
“It’s a very good number and it shows a recovery trend that may put upward pressure on future growth estimates,” Carlos Serrano, chief economist of Banco Bilbao Vizcaya Argentaria SA’s Mexico unit, said by telephone. “What’s behind this is strong growth in the domestic market, especially in services and consumption.”
Economic growth is projected to slow down slightly in 2016 as the monetary and fiscal policy response to adverse external shocks will weigh down on aggregate demand. Sustained macroeconomic, price and financial stability as well as continued investor confidence will contribute to a rebalancing of the sources of growth with increasing (net) exports and private sector investments complementing the steady expansion of private consumption.
Mexico has the 11th-highest GDP in the world based on purchasing power parity, according to the International Monetary Fund. Can Mexico become a ‘major power’ in the world economy? Here’s an interesting perspective from George Friedman, a best-selling author and expert in intelligence and international geopolitics.