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LatinNews Regional Monitor: Mexico - 24 January 2018
In brief: Mexico
* The International Monetary Fund (IMF) has said that Mexico’s domestic economy will benefit from the recently approved tax reform in the US, leading it to post an economic growth rate above Latin America’s average this year. The US tax reform significantly reduces business tax rates, and some Mexican economists have warned that this could negatively impact Mexico’s economy as it could lead to US firms divesting from Mexico and investing more in the US. However, in its latest World Economic Outlook report, the IMF maintains that the overall effect of the US tax reform on Mexico will be positive, as it will boost domestic consumption in the US, increasing demand for Mexican goods. Pointedly, the IMF has decided to revise up its GDP growth rate projection for Mexico this year from the 1.9% forecast last year to 2.3% now. The IMF notes that this is now higher than its 1.9% GDP growth forecast for the whole of Latin America.
