World Economy

Mexico Boosts Growth Outlook

Mexico Boosts Growth OutlookMexico Boosts Growth Outlook

Mexico’s economy is growing faster than expected this year, Finance Minister Jose Antonio Meade said on Friday, raising the government’s economic growth forecast to between 2.0-2.6% from 1.5-2.5%.

Meade said the economy would grow between 2-3% next year, the same as previous forecasts, at an event at the nation’s lower house of Congress where he handed in the government’s 2018 budget proposal, Reuters reported.

Mexico’s Finance Ministry projected a further drop in its public borrowing requirement next year while raising its growth forecast for this year. The government is this year on track to post its first primary surplus in nearly a decade after it cut spending to contain a deficit splurge that threatened Mexico’s credit rating.

Now policymakers say they can slow the pace of budget cuts in 2018 and still get the country’s debt burden on a downward trajectory.

The finance ministry’s plan projects a primary budget surplus of 0.9% of gross domestic product in 2018. That follows what is this year projected to be the government’s first such surplus since 2008, or one of 0.4% of GDP.

The primary budget surplus excludes interest payments on past debts. The budget projects that the total public sector borrowing requirement will fall from 2.9% of GDP in 2017 to 2.5% next year.

Both Standard & Poor’s and Fitch Ratings removed a negative watch on Mexico’s sovereign credit this year following recent spending cuts and an improved growth outlook.


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