Effects of US Downturn Too Early To Call

July 2008 | Daily Alert

BMI View Our 2.9% real GDP growth forecast for the Mexican economy in 2008 was put at risk with the announcement of disappointing Q108 y-o-y growth of 2.6%, 40bps below government estimates of 3.0%.Our 2.9% call was based on a belief in the resilience of the Mexican economy to a slowdown in US consumer spending, as Mexico's manufacturing (maquila) industry is more dependent on US businesses than US consumers. However, a breakdown of GDP by output reveals that this resilience is now under question, perhaps leading to a reassessment in our 2008 growth projections once Q2 data is released.

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