OLDWICK, N.J.–(BUSINESS WIRE)–Mexico’s economy has benefited from a favorable economic environment in
the United States and strong domestic demand, but is facing several
potential headwinds to growth, according to a new AM Best special
report.
The Best’s Special Report, titled, “Uncertain Times for Mexico,
Latin America’s Second Largest Economy,” states that Mexico’s new
president, Andrés Manuel López Obrador, has instituted policies that
have been met with mixed responses. The 2019 budget largely has been
viewed positively; however, his plans to hold additional public
referendums have been less well-received. Uncertainty surrounding his
policies and the implications those policies hold for businesses have
the potential to dampen business and consumer sentiment and could result
in a decline in foreign direct investment, which could drag future
growth. The International Monetary Fund estimates Mexico’s GDP growth at
2.0% for 2018, and projects GDP growth of 1.6% in 2019 and 1.9% in 2020.
The financial and currency markets likely will continue to experience
heightened levels of volatility throughout the year, owing to ongoing
global growth concerns, and unpredictable government policies that may
dent investor sentiment. Monetary conditions have also tightened in
recent years, due largely to currency depreciation, higher interest
rates in the United States and inflation levels higher than the central
bank’s target. Other concerns for growth include the government’s plans
to cut private sector involvement in the oil sector and an increase the
government’s contingent liabilities, which could diminish its fiscal
position and constrain fiscal spending. Although AM Best maintains a
stable outlook on Mexico’s insurance industry, these factors could
create volatility in the operating performance of Mexico’s insurers.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=285163.
AM Best will be hosting a networking event with a brief Latin America
market overview to mark the five-year anniversary of its Mexico-based
subsidiary at Habita Hotel in Mexico City, on Thursday, May 9, 2019,
beginning at 6 p.m. CDT. There is no charge for this event. To attend or
for more information, please visit the event
registration page or email [email protected].
AM Best is a global rating agency and information provider with a
unique focus on the insurance industry. Visit www.ambest.com
for more information.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its
affiliates. ALL RIGHTS RESERVED.
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Contacts
Ann Modica
Economist, Credit Rating
Criteria,
Research & Analytics
+1 908 439 2200, ext. 5209
[email protected]
Christopher
Sharkey
Manager, Public Relations
+1 908 439
2200, ext. 5159
[email protected]
Jim
Peavy
Director, Public Relations
+1 908 439
2200, ext. 5644
[email protected]
