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Mexico

Macro View

Markets

Finance & Banking

Geostrategic & Long Term Issues

Key Indicators

Economic Activity Index
(2003=100, SA)
110.97,109.03,110.68,110.83,113.02 113.02
Consumer Price Index - Total
INPC
(Index 2002Q2 = 100, NSA)
136.84,137.26,137.97,138.54,140.05 140.05
Foreign Trade
Balance
(Million Dollars, NSA)
-782.3,-1074.65,96.3,-195.2,-248.2 -248.2
Industrial Production
Total
(2003 = 100, SA)
106.22,105.98,105.6,106.99,108.43 108.43
28 Days Interbank Equilibrium Rate [TIIE]
(Percent, NSA)
-9999.99,4.87,4.89,4.87,4.89 4.89
Consumer Survey
Consumer Confidence Index
(January 2003=100, NSA)
81.9,77,78.2,80.1,82.1 82.1
data by Moody's

Current Economic Outlook

RGE continues to believe that Mexico’s economy will fall less severely in H2 2009 (‐5.1% y/y), compared to H1 2009 (‐9.3% y/y), on the recovery of domestic sentiment and somewhat better external conditions. This means that on a seasonally adjusted basis, Mexico likely touched bottom in Q3 2009. Though RGE anticipates GDP to post positive growth starting in Q1 2010, on a year‐over‐year basis, this will mainly be on the back of a low base rather than improvements in real growth dynamics. This assessment relies upon RGE’s view that the U.S. economy will contract 2.7% in 2009 and expand 1.8% in 2010. Overall, RGE maintains the view that Mexico’s GDP will contract 7.2% y/y in 2009 (for a range of ‐6.75% y/y to ‐7.25% y/y) and that the rebound will be modest at around 2.75% (2.5% y/y to 3.5% y/y range) in 2010, which is below potential (3.3% y/y). The main risks to Mexico’s outlook are a “W”‐shaped business cycle in the U.S., (which is not RGE’s base case scenario), lack of Mexican reforms, and continuous decline in oil output.

Read the latest RGE Global Economic Update.

RGE Analysis

Latin America: What’s Coming Up?

By Bertrand Delgado Feb 08, 2010

Mexico: Q1 2010 Outlook

By Bertrand Delgado Jan 30, 2010

Carry Trade Hotspots: A Currency by Currency Forecast for 2010

By Mikka Pineda, Mary Stokes, Bertrand Delgado, Mikko Forss, Kavitha Cherian, Arpitha Bykere and Christian Menegatti Jan 04, 2010

Come to Mother: An RGE Strategy for the 2010 Carry Trade

Arnab Das, Natalia Gurushina, Jennifer Kapila, Elisa Parisi-Capone Jan 04, 2010

RGE Currency Outlook: The Mexican Peso

By Bertrand Delgado Jan 01, 2010

Latin American CDS: Fully Recovered, What Are the Risks?

Alejandro Rivera, Elisa Parisi-Capone and Bertrand Delgado Nov 13, 2009

Global Monetary Policy Outlook

The RGE Analyst Team Nov 11, 2009

Are Capital Controls in Fashion Again?

RGE Analyst Team Oct 28, 2009

Mexico Economic Outlook, Q4 2009

Bertrand Delgado Oct 07, 2009

Mexico Economic Outlook, Q3 2009

Bertrand Delgado Jul 24, 2009

ECB, BoT, BoK, BoE, BoJ; China; Mexico; Iceland

Christian Menegatti Apr 10, 2008

EconoMonitors

Latin America Economonitor

Mexico - 2010 State and Local Elections: Relevance, Current Dynamics, and Outlook

Alejandro Schtulmann Feb 3, 2010

Latin America Economonitor

A New Latin American Boom Seems to be Starting but it will be Plagued with Risks

Eduardo Lora Feb 2, 2010

Latin America Economonitor

Mexico: Five Key Political Risks in 2010

Alejandro Schtulmann Jan 15, 2010

Emerging Markets Monitor

In Praise of Roads

Walter Molano Jan 14, 2010

Latin America Economonitor

Outlook for Mexico in 2010

Alejandro Schtulmann Jan 12, 2010

Latin America Economonitor

Carstens Proposed to Lead Banxico; Cordero Goes to Hacienda; Changes Do Not Improve the Status Quo; Political Appointments Prevail at Hacienda and Sedesol

Alejandro Schtulmann Dec 10, 2009

Latin America Economonitor

Banxico’s Chairman Election Process: Unnecessary Uncertainty

Alejandro Schtulmann Dec 8, 2009

Latin America Economonitor

Drug Violence: Reaching a New Pinnacle

Alejandro Schtulmann Nov 17, 2009

RGE Analysts' EconoMonitor

Latin American CDS: Fully Recovered, What are the Risks?

Alejandro Rivera, Elisa Parisi-Capone and Bertrand Delgado Nov 17, 2009

Latin America Economonitor

The End of Luz y Fuerza: Recap, Analysis, and Ramifications

Alejandro Schtulmann Oct 20, 2009

Latin America Economonitor

Desertion, Low Morale, and Readiness: Assessing the Mexican Army’s Involvement in the War Against the Cartels and its Impact on Capabilities for Traditional Responses

Alejandro Schtulmann Sep 29, 2009

Latin America Economonitor

On the Links to a Recovery in Latin America

Javier Guillermo Gomez Pineda Sep 8, 2009

Daily Digest

RGE Writings

Mexico: Q1 2010 Outlook

RGE  Bertrand Delgado Feb 9, 2010

News

Amid drug war, Mexico less deadly than decade ago

The Washigton Post  Feb 8, 2010

News

Mexico’s Sanchez ‘Ready to Be Surprised’ by Pace of Recovery

Business Week  Jacob Greber and Heidi Couch Feb 7, 2010

News

Mexico GDP May Grow More Than 3% in 2010, Werner Says

Bloomberg  Jens Erik Gould and Laura Price Feb 5, 2010

News

J.P. Morgan Stays Overweight Emerging-Market Sovereigns

Wall Street Journal  Riva Froymovich Feb 4, 2010

News

Carstens Says Mexico Price Expectations Are Anchored

Bloomberg  Emma Ross-Thomas Feb 2, 2010

News

Mexico's PAN and PRD: Love letters in the making?

LA TImes  Ken Ellingwood Feb 1, 2010

News

Mexico Ends 2009 With Fiscal Deficit Equal To 2.3% Of GDP

Wall Street Journal  Anthony Harrup Jan 30, 2010

News

Mexico GDP Down 6.8 Percent in 2009

ABC News  Jan 30, 2010

Analysis

Mexico: The Path of Interest Rates in 2010

BNP Paribas  Italo Lombardi and Rafael de la Fuente Jan 29, 2010

News

Latin America rejects old U.S. approach in drugs war

Reuters  Luis Andres Henao Jan 29, 2010

RGE Writings

Bremmer-Roubini 2010 Global Forecast

RGE Analysts' EconoMonitor  Nouriel Roubini and Ian Bremmer Jan 28, 2010

News

Brazil, Chile, Peru: Latin America Bond and Currency Preview

Bloomberg  Andrea Jaramillo Jan 28, 2010

News

Mexico’s Bank May Buy Dollar Reserves From Market

Bloomberg  Jens Erik Gould and Jose Enrique Arrioja Jan 28, 2010

News

Mexico House to Vote on New Tax Bill in April, Lawmaker Says

Bloomberg  Jens Erik Gould and Adriana Lopez Caraveo Jan 27, 2010

News

HSBC Says Mexico More Attractive Than Brazil on U.S. Recovery

Bloomberg  Alexander Ragir Jan 26, 2010

News

Mexican Debt May Rally Most Since 2006 on Economy

Bloomberg  Jens Erik Gould Jan 25, 2010

News

Mexico president race could look like soap opera

The Washigton Post  Mark Stevenson Jan 25, 2010

News

The week in Mexico: 1-24-2010

Signon San Diego  David Gaddis Smith Dec 25, 2009

News

Mexico Prices Rose 0.75% in the First Half of January

Bloomberg  Jens Erik Gould Jan 22, 2010

News

Mexico The Industrial Fiesta

Morgan Stanley Global Economic Forum  Luis Arcentales Jan 20, 2010

News

Mexico Fin Min: Mexico May Renew IMF Credit Line

Wall Street Journal  Meena Thiruvengadam Jan 20, 2010

News

Mexico's Retail Association Antad Sees 2010 Sales Up 5.5%

WSJ  Paul Kiernan Jan 20, 2010

News

Mexico’s Inflation May Peak in April, Banxico Official Says

Bloomberg  Thomas Black Jan 19, 2010

News

Mexico November Tourism Revenue Down 7.9% On Year To $928.3M

Wall Street Journal  Paul Kiernan Jan 15, 2010

News

‘Massively’ Cheap Mexican Peso Wins Over Aberdeen

Bloomberg  Ye Xie and Tal Barak Harif Jan 19, 2010

News

LATAM WEEKAHEAD-Inflation seen rising in Brazil and Mexico

Reuters  Daniel Bases Jan 17, 2010

Opinions

Latin American elections

Financial Times  Lex Jan 19, 2010

News

UPDATE 1-Mexico Oct economy grows for second straight month

Reuters  Jason Lange and Theodore d'Afflisio Jan 15, 2010

News

Bank of Mexico Keeps Rate at 4.5% on Tame Inflation

Bloomberg  Jens Erik Gould Jan 15, 2010

News

Mexico Retailers December Same-Store Sales Up 6% On Year

Wall Street Journal  Anthony Harrup Jan 13, 2010

News

UPDATE: Mexico Auto Production, Exports Rebound In December

Wall Street Journal  Laurence Iliff Jan 12, 2010

Opinions

Beyond BRIC: Introducing MAVINS

Seeking Alpha  Jan 7, 2010

Analysis

Mexico Projects Higher Gas Consumption in 2024

Global Insight  Jan 4, 2010

News

Mexico City Government Sees Number Of Tourists Up 35% In 2010

NASDAQ  Anthony Harrup Dec 30, 2009

News

Calderon's Reform Plan

Forbes  Oxford Analytica Dec 22, 2009

News

Along U.S.-Mexico Border, a Torrent of Illicit Cash

New York Times  Marc Lacey and James C. Mckinley Jr. Dec 25, 2009

News

Mexican Bonds Drop as Government Boosts Debt Sales to Cover Gap

Bloomberg  Andrea Jaramillo Dec 23, 2009

Analysis

Mexico: Q3’09 Demand Confirmed Generalized Recovery

Citigroup  Arturo Vieyra Dec 23, 2009

News

Mexico Seeks Brazil Free-Trade Accord by 2012, Official Says

Bloomberg  Jens Erik Gould Dec 22, 2009

Analysis

Mexico: Banamex Survey of Market's Inflation and Monetary Policy Expectations

Citigroup  Arturo Vieyra and Joel Virgen Dec 22, 2009

Analysis

2010 Global Economic Outlook

Nomura  Dec 16, 2009

News

Mexico's Carstens: Committed To Keeping Down Inflation

Wall Street Journal  Anthony Harrup Dec 15, 2009

News

Mexico’s Senate Approves Carstens as Bank Governor (Update1)

Bloomberg  Jens Erik Gould and Adriana Lopez Caraveo Dec 16, 2009

Analysis

Mexico: S&P Downgrades, As Expected

Citigroup  Geoffrey Dennis and Jason Press Dec 16, 2009

Analysis

Mexico: Carstens set to return to Banxico as its governor

Citigroup  Sergio Luna Dec 16, 2009

Analysis

Mexico: P. Calderón Sends to Congress a Political Reform Proposal

Citigroup  Alonso Rios Dec 16, 2009

Analysis

Mexico: Life After Cantarell

Citigroup  Lourdes Rocha and Sergio Luna Dec 16, 2009

Analysis

Mexico: October IP came on the downside at -5.2% y/y

BNP Paribas  Dec 15, 2009

News

Mexico’s Credit Rating Downgraded One Level by S&P

Bloomberg  Catarina Saraiva Dec 14, 2009

Analysis

United Mexican States FC And LC Ratings Lowered By One Notch; Outlook Stable

S&P (Free Registration required)  Dec 14, 2009

News

LATAM WEEKAHEAD-Central banks to signal low rates to stay

Reuters  Walter Brandimarte Dec 14, 2009

News

Mexico's drug cartels siphon liquid gold

Washington Post  Steve Fainaru and William Booth Dec 13, 2009

News

Mexico: The War with the Cartels in 2009

Stratfor Global Intelligence  Scott Stewart and Alex Posey Jan 1, 1900

News

Fate of Ex-Honduran Leader Is in Doubt

New York Times  Elisabeth Malkin Dec 9, 2009

Analysis

Mexico: Calderon has appointed Carstens to the CB; Cordero moves to Hacienda

BNP  Italo Lombardi, Rafael de la Fuente, Diego Donadio and Alexandre Lintz Dec 10, 2009

Opinions

As oil production fades, Mexico is losing its clout

Project Syndicate  Denise Dresser Dec 9, 2009

News

Calderon Nominates Carstens for Mexico Central Bank

Bloomberg  Andres Martinez and Jens Gould Dec 9, 2009

News

Mexico Consumer Prices Rose 0.52% in November From Prior Month

Bloomberg  Thomas Black Dec 9, 2009

Analysis

Mexico: Hike Another Day

Morgan Stanley  Luis Arcentales Dec 9, 2009

Analysis

Mexico: We had the honor of sponsoring an EMTA luncheon with the Minister of Finance Carstens

BNP  Italo Lombardi, Rafael de la Fuente, Diego Donadio and Alexandre Lintz Dec 9, 2009

News

Carstens Expects S&P to Hold Mexico’s Debt Rating

Bloomberg  Thomas Black and Jens Erik Gould Dec 8, 2009

News

Brazil and Mexico: Latin American Bond and Currency Preview

Bloomberg  Camila Fontana Dec 8, 2009

Analysis

Brazil v. Mexico and the “Risk Trade”

Citigroup  Geoffrey Dennis and Jason Press Dec 8, 2009

Analysis

Mexico: Consumer confidence remained subdued in November

BNP  Italo Lombardi, Rafael de la Fuente, Diego Donadio and Alexandre Lintz Dec 7, 2009

News

Mexico ‘Not Going Anywhere’ Without Reform, Leos Says

Bloomberg  Veronica Navarro Espinosa Dec 4, 2009

News

EMERGING MARKETS-Mexico peso at 13-month high, LatAm stocks slip

Reuters  Herbert Lash and Leslie Adler Dec 4, 2009

News

Mexico's Stock, Peso Rally Fizzles As US Jobs Euphoria Fades

Wall Street Journal  Ken Parks Dec 4, 2009

News

U.S. lagging in sending anti-drug aid to Mexico, GAO says

Washington Post  William Booth Dec 4, 2009

News

Calderón’s rating slumps to lowest level

Financial Times  Adam Thomson Dec 1, 2009

News

Mexico Peso Gains After U.S. Jobless Rate Unexpectedly Drops

Bloomberg  Tal Barak Harif Dec 4, 2009

News

Mexico Peso Set for Biggest Weekly Gain on Inflation Forecasts

Bloomberg  Tal Barak Harif Dec 4, 2009

News

Mexico’s Currency Rises on Rate Outlook, Gains for Oil, Stocks

Bloomberg  Carlos Manuel Rodriguez Dec 2, 2009

News

Mexico’s Central Bank Raises 2010 Inflation Forecasts

Bloomberg  Jens Erik Gould and Crayton Harrison Dec 2, 2009

News

Carlos Manuel Rodriguez

Bloomberg  Carlos Manuel Rodriguez Dec 2, 2009

Analysis

Mexico: October remittances were down sharply

BNP Paribas  Dec 2, 2009

News

Mexicans Evading Tax Mock Calderon’s Bid to Wean Nation Off Oil

Bloomberg  Thomas Black and Jens Erik Gould Dec 2, 2009