Mexico’s Growth Estimates at an Average of 1 PercentBy Cas Biekmann | Fri, 02/21/2020 - 17:10
Growth estimates in Mexico’s GDP range between 0.6 percent up to 1.5 percent. Last year, foreign direct investment grew, albeit less than in previous years. HSBC faces an arduous road ahead, the Ministry of Finance prepares a reform and China takes big steps to boost its economy.
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Financial Groups Estimate GDP in Mexico Will Grow 0.9 Percent
Most financial institutions estimate the country’s growth to be 0.1 percent below the estimate form two week ago, capping in at 1 percent exactly. Other institutions like Barclays and BNP Paribas estimate growth to be at 0.6 percent. The highest estimates come from BBVA at 1.5 percent.
Foreign Direct Investment Grew 4.2 Percent in 2019
In the first year of López Obrador’s administration, almost MX$33 billion (US$1.75 billion) was invested in Mexico, representing a 4.2 percent increase compared to 2018, says the Ministry of Economy. It is the lowest increase since 2016. The ministry attributes these figures to the uncertainty of negotiating USMCA, as well as the voting of a newly elected party in office. With USMCA in place, predictions for 2020 are tentatively positive.
Ministry of Finance Prepares Reform for Financial Sector
Deputy Minister Gabriel Yorio says the ministry has been working on a reform that includes a revision of regulatory processes and tax layouts for the sector. The aim is to create greater development for the sector so it becomes a driver for improvement in the country. Insiders in the sector have welcomed the proposal.
HSBC Lays Off 35,000 Employees Worldwide
The news comes after the bank announced a decline in profits, as well as issues with adverse effects stemming from the COVID-19 outbreak. The bank has a strong presence in Asia. Other important markets for the bank are the US and Europe, where they are dealing with drawbacks from the US-China trade war. Nevertheless, the bank was able to show positive figures in the Mexican market.
China: Banks Cut Lending Rate to Offset Negative COVID-19 Effects on Economy
In a bid to boost the country’s virus-affected economy, banks opted to cut the lending rate. S&P warns there might be a spike of US$1.1 trillion in bad loans and low annual economic growth of 4.4 percent in China. The reduced one-year loan prime rate, influential in China’s financial system, is the single largest attempt so far to boost China’s economy.