Economists upgrade Mexico growth prospects despite Nafta furor

4/27/2018 Financial Times

Arrow Graph by Flickr user nDevilTV http://www.flickr.com/photos/ndevil/3491395689/Something strange has started happening in Mexico: upward revisions in growth forecasts despite worries over the future of the North American Free Trade Agreement (Nafta), which escalated this week on fears that President Donald Trump was laying the groundwork for the US to quit the pact.

Until recently, talk among economists in Mexico had concerned possible recession. Just last month, the central bank further reduced its growth estimates, the fifth such cut in a year, while the finance ministry lowered its outlook, both to between 1.3-2.3 per cent.

But economists at Santander, JPMorgan, BBVA Bancomer and Citibanamex have all in the past few weeks moved to increase economic growth predictions by at least half a point, and as much as 0.7 point in the case of JPMorgan. In part this reflects the more conciliatory noises coming out of Washington on Nafta, including from Mr Trump’s commerce secretary Wilbur Ross, which has helped the peso erase its significant post-US election losses.

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