Mexican companies hedge, delay deals as NAFTA, elections loom

04/30/2018 Reuters

Source: Eneas De Troya, Flickr

Mexican companies are delaying investment, bringing forward imports to protect against currency swings and warning the next few months could be volatile as the NAFTA trade talks reach a climax and July’s presidential election nears.

From bakers to retailers and construction firms, more than a dozen of Mexico’s biggest companies cited concerns over NAFTA and the election when issuing conservative guidance in recent weeks, despite economic data pointing to an uptick in Latin America’s second-largest economy.

Grupo Bimbo (BIMBOA.MX), the world’s largest breadmaker, said it was delaying capital expenditure and tightening costs due to a volatile economic environment amid the presidential campaign.

Read more…


EVENT ON MONDAY | The State of Mexico’s Economy

mexican pesosWHEN: Monday, January 9, 1:30-3:00pm

WHERE: 6th Floor Board Room, Wilson Center, Washington, DC

Click to RSVP

The Wilson Center’s Mexico Institute is pleased to invite you to an event with the International Monetary Fund’s Mexico team, who will present the conclusions of the recently-completed 2016 Article IV consultation with Mexico.

Mexico’s economy has been growing at a moderate pace, inflation is low, and the unemployment rate has been declining. Fiscal consolidation has begun and the financial system remains strong and resilient to severe shocks. It would be critical to adhere to the planned fiscal consolidation to put the public debt ratio on a downward path, and take steps to strengthen the commitment framework for fiscal policy. Steadfast implementation of the plan to reform PEMEX and strengthen its financial viability is also important. Future monetary policy decisions should continue to be guided by the objective of keeping inflation expectations anchored, while clear communication by the central bank is critical. The exchange rate should continue to act as the key shock absorber to help the economy adjust to external shocks. Significant progress has been achieved in strengthening financial sector prudential oversight but some gaps remain, especially in the governance framework of CNBV and IPAB. On the structural front, strengthening the rule of law and boosting female labor supply would boost potential output and reduce inequality and poverty. Going forward, Mexico will need to navigate an uncertain and complex external environment, with elevated risks of protectionism and heightened global financial market volatility.


Robert Rennhack
Deputy Director, Western Hemisphere Department, IMF

Costas Christou
Advisor, Western Hemisphere Department, IMF

Alex Klemm
Senior Economist, Western Hemisphere Department, IMF

Damien Puy
Economist,Western Hemisphere Department, IMF

Fabian Valencia
Senior Economist, Western Hemisphere Department, IMF


Christopher Wilson
Deputy Director, Mexico Institute, Wilson Center


Duncan Wood
Director, Mexico Institute, Wilson Center

Click to RSVP

Bill Gross Bets Big on Mexico Months After Slashing Bond Holding

07/25/2016 Bloomberg 

Photo Credit: Bloomberg

Billionaire bond fund manager Bill Gross is rekindling his love of Mexico.


The nation’s inflation-linked notes maturing in 2025 were among the top five holdings in Gross’s $1.5 billion Janus Global Unconstrained Bond Fund as of June 30, according to the fund’s website. Just three months earlier, he’d unloaded all of his Mexican government debt, marking what appeared to be a significant shift in his investment strategy after he’d spent years touting the country’s financial assets.

Read more…

BMW moves forward with new plant in Mexico

17/06/2016 USA Today

BMW has started construction of a new factory in Mexico, becoming the latest automaker to head south of the border.

The BMW Group’s new facility, estimated to be ready for production in 2019, will be located in San Luis Potosi, an area that’s home to several auto plants from various makers. Construction began Thursday with a groundbreaking ceremony. It will be building the BMW’s best-selling car line, the BMW 3 Series, and is expected to meet a production capacity of up to 150,000 cars per year. The BMW Group is investing around $1 billion in the plant, which is expected to create 1,500 new jobs.

BMW adds to the growing number of automotive jobs that have migrated to Mexico over the past decade. Mexico has seen a 40% increase in auto jobs from 2008 to 2014, according to the Center for Automotive Research. The U.S. has only seen a 15% increase in the same period.

Read more…


Mexican Peso Hit by Risks From Brexit to Trump

06/14/2016 The Wall Street Journal

pesomexicanoMEXICO CITY—Mexico’s peso slid Tuesday to its weakest level against the U.S. dollar since February, moving toward the record lows that prompted the central bank earlier this year to raise interest rates and intervene directly in the foreign exchange market.

Read more…

Mexican government sees gold, silver production down in 2016

4/8/16 Reuters

Mexico expects gold and silver production this year to drop while copper output will be flat as low prices continue to weigh on the sector, the government’s top mining official said in an interview.

Mario Cantu, the economy ministry’s general mining coordinator, said gold output this year is estimated to reach about 120,000 kilograms, or down nearly 4 percent compared to production of 124,581 kg in 2015.

Silver production is expected to fall in 2016 by more than 6 percent compared to last year, to reach 5,245 tonnes.

Meanwhile, copper output is seen flat this year at about 540,000 tonnes, compared to production of 540,468 tonnes in 2015. (Reporting by David Alire Garcia)

Read more…

How an Overlooked Impact of Mexico’s Drug Violence is Holding Back its Economy

3/19/16 Business Insider

The war on drugs that has raged across Mexico over the past decade has led to the deaths and disappearances of hundreds of thousands of people.

The human costs of the drug war and related violence are well known, but the chilling effect on Mexico’s economic vitality has been harder to measure.

Recent research has shown that high levels of violence in Mexico — like the 7.6% increase in homicide rate the country experienced in 2015 — not only have a negative impact on workers, but also prevent complex economic activities from starting and growing.

Read more…