The recent victory of Donald Trump in the US presidential election has fostered uncertainty within the Mexican business community. Hundreds of articles have been written about what could happen if NAFTA were reviewed and how Mexico would cope without its major trading partner.
Mexico is on track for a GDP growth rate of below 2.4% for the year 2016 according to the International Monetary Fund (IMF), while the Ministry of Finance and Public Credit’s growth estimations for 2016 are between 1.7 and 2.5%. Core inflation is at 3%, a figure that fits the Bank of Mexico’s target of between 2 and 4%. In the US, the Federal Reserve announced an increase of +0.25% from to 0.75 in interest rates before the end of 2016, alongside the election of Donald Trump, a top contributing factor influencing the strength of the Mexican peso. These indicators paint a pic- ture of an economy facing macroeconomic risks including the potential devaluation of the peso, a higher inflation, an expected increase in public debt and rising interest rates.