One Of Latin America's Bright Spots Is Dimming
Growth estimates for this year continue to decrease. The latest number is 2.3%, reported by the Wall Street Journal today, down from a 2.5% forecast in September. At the start of the year, the government had forecasted 3.9% growth, according to Reuters, but then experienced a pretty terrible first half of the year. Growth has been moderately good in the third quarter, but not great.
It should be said that even 2% growth is better than a lot of countries in Central and South America. At last week's meeting, the Banco de Mexico announced interest rates would remain unchanged at 3%, citing new signs of weakness in the global economy.
In a note to clients this week, UBS wrote, "Contrary to most countries in the region, Mexico's economy is on a clear upswing and closely tied to the United States. But a failure to implement capital spending effectively by the government has led to lower than expected growth this year, a phenomenon that we think will still weigh on the economy in 2015."