Quotes from Barclays Capital:- Mexico’s GDP proxy (IGAE index) increased 0.6% m/m sa in October in line with our forecast (0.6%) mostly driven by a positive performance in the services sector (0.7%) and industrial activities (0.3%), partially offset by a contraction in primary activities (-2.1%).- The economy seems to be gaining steam in Q4, reducing the fears of persistent weakness. We expect growth to continue to improve, though rather moderately in Q1 15. The reduction in gas prices and the MXN real depreciation combined with strong US growth should provide support to the manufacturing sector. – However, the private sector (firms and consumers) might still face headwinds as the last negative effects from fiscal reform will be experienced in March when firms and households are required to report their final annual income tax; this will reflect the increased tax burden resulting from fiscal reform.- All in, we expect the economy to expand 3.3% y/y in 2015, also supporting our view that Banxico will wait to confirm that the economy is on a stable track for a recovery, under controlled inflation, in order to make a move.
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