Mexico grew by an estimated 2.1 percent pace in 2014 and rebound to 3.3 percent in 2015 and 3.8 percent in 2016 and 2017, above the average for Latin America, the World Bank predicted today.
In its World Economic Outlook, the bank said that full implementation in Mexico of its “ambitious and well-targeted” reforms in energy, telecommunications, employment and competitiveness, should remove some of the obstacles to economic growth.
“The reforms to increase productivity and extensive exhibition to the United States should support the growth of Mexico,” said World Bank.
The updated projections of economic growth of Mexico during 2014 are three tenths of percentage point less regarding its estimate last October and two tenths less in the case of calculation for 2015.
As for Latin America, the World Bank estimated that the region will grow on average 0.8 percent in 2014, 1.7 percent in 2015, 2.9 percent in 2016 and 3.3 percent in 2017.
Among the largest economies in the region, economic growth in Brazil was estimated at just 0.1 percent in 2014, 1.0 percent in 2015 and 2.5 in 2016.
While Argentina recorded -1.5 percent in 2014, -0.3 percent in 2015 and 1.6 percent in 2016, according to World Bank projections.
“A sharper slowdown than expected in China and steepest decline in prices of commodities represent significant downward prospects risks,” said the multilateral organization.
The report acknowledged in this regard that the drop in oil prices weaken activity in oil exporting countries, with impact on its trading partners and in countries receiving remittances or official support.
However, the World Bank noted that the ability to adjust to global “shocks” will depend importantly on the policy framework of each individual country and its implementation.
“Countries with relatively more credible frameworks and government policy-oriented reforms (Mexico, India, Kenya and Senegal) is more volatile global financial conditions more easily adjusted to narrowing or” said the bank.
It also warned that the adjustment will be more difficult for countries with limited room, weak growth prospects, high exposure to flows of short-term investments and a large portion of debt held by foreign investors maneuver.
The report noted that capital flows slowed significantly in Latin America in 2014 “partly reflecting weak activity.”
“This is largely due to a sharp drop in the flow resource to Brazil and Mexico, where weak growth prospects it discouraged investors, “he said.
In contrast, the World Bank said,” issuing bonds reached their highest levels in registration late 2014, as the prospect of a narrowing of the monetary policy of the United States encouraged a wave of refinancing “.
Brazil and Mexico accounted for 76 percent of all bond issues in 2016, according with the institution.
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