World Economy

Reforms Will Help Mexican Economy

Reforms Will Help Mexican EconomyReforms Will Help Mexican Economy

The Mexican economy, as measured by the inflation-adjusted gross domestic product data, will expand 2.5% in 2016, Plastics News reported. This follows similar gains of 2.5% in 2015 and 2.3% in 2014. Our forecast for a steady pace of growth in the coming year is based on expectations that a decline in domestic economic activity resulting from the recent drop in oil prices will be mitigated by an increase in demand for Mexican exports from the US. Regrettably, Mexico is not yet able to benefit fully from the strengthening US economic recovery. The Mexican industrial sector is still struggling from a need for infrastructure upgrades and other types of structural reforms necessary to support a more rapid expansion of its industrial capacity. Under current conditions, an annual growth rate of 2.5% in its GDP is about all that can be expected in terms of long-term economic growth. Recent fiscal reforms will help attract the necessary investment, but it will take a few years for this process to produce more rapid growth in industrial capacity.