Recent reforms will help Mexican economy

3/16/2016 Plastics News 

drawing bar chartThe Mexican economy, as measured by the inflation-adjusted gross domestic product data, will expand 2.5 percent in 2016.

This follows similar gains of 2.5 percent in 2015 and 2.3 percent 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 U.S.

Regrettably, Mexico is not yet able to benefit fully from the strengthening U.S. 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 percent in its GDP is about all that can be expected in terms of long-term economic growth. And this pace of growth is not fast enough to raise the standard of living for most Mexicans. Recent fiscal reforms will help to attract the necessary investment, but it will take a few years for this process to produce more rapid growth in industrial capacity.

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