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Until the second year of the government of Andrés Manuel López Obrador (AMLO), uncertainties about the macroeconomic situation will increase, as it will be up to the economic team to develop the federal budget for 2020 , warned Credit Suisse analysts.
For now, the victory of AMLO and its majority in Congress, particularly in the Senate, is a factor of concern for investors, said Carlos Capistrán, economist for Mexico and Canada at Bank of America Merrill Lynch. BofA-ML)
"The virtual president and the next Secretary of the Treasury, Carlos Urzúa, have focused the economic message on the assertion that they will respect the autonomy of the Bank of Mexico (Banxico ), the flexibility of the exchange rate, which will support the renegotiation of the North American Free Trade Agreement (NAFTA) and its intention to maintain the stability of public finances, clearly positive signs ", explains the strategist of BofA-ML
of New York, admits that investors, including from Asia, have shown great interest in knowing the results of the electoral contest, and now the economic policies of the new administration. 19659002] With him, Alonso Cervera, chief economist for Latin America at Credit Suisse, explains that in the next five months, those of the transition of power, "investors will pay attention to the AMLO designations for key cabinet positions, such as the executive directors of Petróleos Mexicanos (Pemex), the Federal Electricity Commission, as well as the proposal for ratification, or the replacement of Manuel Ramos Francia, deputy governor of the Bank of Mexico , whose position ends on December 31 year. "
Credit Suisse's strategist revealed an analysis where he considers that" the new era of Mexico, which begins with the triumph of AMLO ", will have a moment of Importance in 2020, your second year of government
"At this time, it will be possible to confirm whether the government has achieved the budget savings promised by the austerity measures and the fight against the horn ruption which, according to López Obrador, will amount to 2 points of the internal product. They indicate that the private sector will remain vigilant about AMLO decisions on key infrastructure projects, such as the New Mexico International Airport, and the implementation of energy reform.
Expectations of GDP in 2019, to revise
In conversation, the Bank of America economist admits that plans to double pensions for the elderly and scholarships for young people will have a positive impact on consumption . Older people tend to spend more, which will help them spend, he said.
Admittedly, higher expenditures could generate some pressure on inflation, which would require special attention from Banxico that could lead to rate hikes.
We will have to see how events develop, to have new predictions. For now, holds the forecast growth of 2% for this year and the other, with an upside risk for GDP expected in 2019.
Avizoran NAFTA three
The strategist at Bank of America believes that the call What US President Donald Trump has done to AMLO is the sign that they are in the best position to maintain a good relationship.
He warns that his basic scenario on the outcome of the renegotiation is a renewed agreement between the three countries. Forecast that will likely be reached in 2020.
Meanwhile, Credit Suisse's expert predicts that trading will extend to the first year of the new administration, that is in 2019. [19659002] For the Swiss company, it is enough So it makes sense that the United States continue to insist to get out of the deal and negotiate a bilateral agreement with Mexico
"This scenario would be more disturbing for regional trade flows and for foreign investment prospects ", says Cervera. f, b, e, v, n, t, s)
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