Friday, 20 Apr 2018
Business

IMF maintains unchanged growth estimate for Mexico in 2018 and 2019

He International Monetary Fund (IMF) maintained its economic growth outlook for Mexico of 2.3 percent in 2018, and 3 percent for 2019, according to its report ‘World Economic Perspectives’ published this Tuesday. These figures are the same as those he presented in January, when he raised his growth forecasts for the Gross Domestic Product (GDP) in 0.4 and 0.7 percent their forecast for this year and the next, respectively. In order for the Mexican economy to improve, the IMF mentioned that priority should be given to initiatives that eliminate investment limitations. “Priority should be given to initiatives that will eliminate the key limitations of investment and boost growth in the medium term, including the implementation of judicial reforms aimed at corruption and promoting the rule of law, as well as labor market reforms that will help to reduce informality, “explained the agency in the text, prior to the start of its spring meeting in Washington, D.C. The Monetary Fund acknowledged that Mexico has made progress in implementing reforms such as those focused on the energy, financial and telecommunications sectors, but “we need to work on aspects that hinder investment and economic growth” and emphasized the fight against corruption and the issue of governance. Protectionism threatens global economic growth The worldwide economy will maintain its growth in 2018 and next year at a rate of 3.9 percent, from 3.8 percent in 2017, supported the reinvigoration of international trade. However, threats of protectionist policies call into question that this growth is sustained in the medium term, the IMF warned in the same report. “He current momentum is not assured, in the medium term it is estimated that the world economy slows down at a rate of 3.7 percent, “he said. Under different scenarios, the Monetary Fund concluded that increasing protectionism in all countries leads to a 10 percent increase in import prices everywhere, reduces world production and consumption by about 1 percent after five years and close to 2 percent in the long term, while global investment and trade fall further. The agency explained that there is a “notable rebound” in global trade due to a recovery in investments in advanced economies, continued growth in Asia, a recovery in Europe and signs of improvement in several commodity exporters. Global trade, which tends to be highly correlated with global investment, recovered strongly in 2017 after two years of weakness, at a real growth rate of 4.9 percent. It had its greatest dynamism among emerging and developing economies, where it rose from 2.2 percent in 2016 to 6.4 percent in 2017, reflecting the improvement in investment. For the IMF, TPP-11, and the announcement of the signing of the agreement that establishes a Continental Free Trade Area that could cover all of Africa, represents progress in plurilateral trade integration. However, he perceived a weakening of support for globalization with the renegotiation of agreements such as the North American Free Trade Agreement (NAFTA) and the economic pact between United Kingdom and the rest of the European Union.

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