The financial group Citibanamex revised downwards its estimate for the Mexican economy next year to 0.2%, from the previous estimate of 0.8%, due to the return of Donald Trump to power and, to a lesser extent, what it described as the intensification of legal uncertainty in the country.
“There remains uncertainty about which party will win the majority of the House of Representatives, which is important, since the support of both chambers is required to implement the fiscal package promised by Trump. However, it requires much less support to apply its policies related to trade, migration, regulation and energy, among others,” he explained in an analysis this Wednesday.
He pointed out that even with both chambers under Republican control, he does not believe that the future president will fulfill all his campaign promises.
“However, the climate of high uncertainty will prevail, particularly over the effects of potential policies for Mexico, given the extreme nature of its proposals and the wide margin on the degree to which it implements them,” he indicated.
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The adjustment in the forecast for next year is less than the 1% expected by the consensus of analysts consulted by Citibanamex, a figure that was published yesterday afternoon, before the results of the elections in the United States were known.
Analysts consulted by Banxico in October expect the Mexican economy to advance 1.17% in 2025.
Citibanamex added that with yesterday’s decision by the Supreme Court, the election of judges will be carried out “and the judicial disorder that entails.”
He considered that the institution will no longer play a counterweight role to the Executive and Legislative powers, controlled by Morena.
“In fact, there will no longer be legal counterweights to government decisions in practice. “The legal and general uncertainty about the rules of the game in Mexico continues to deteriorate,” he noted.
“In this sense, the upcoming disappearance of a good part of the autonomous organizations has already been formally announced,” he added.
Citibanamex adjusted upwards its forecast for the exchange rate for this and next year. For 2024, it raised it from 19.7 pesos per dollar to 20.4 and for 2025 from 20.4 to 21.1.
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“We estimate that Banxico will maintain its cycle of rate cuts, since we estimate that the upward effect on inflation resulting from the greater exchange rate depreciation will be compensated by lower growth, which implies lower inflation,” he said.
With information from Francisco Rivera
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