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BBVA Research – Mexico Economic Outlook 4Q18 / 1

Mexico

Economic Outlook

Fourth quarter 2018


01Global economy


Positive global momentum continues, although the risks are

intensifying

Robust global growth, albeit more

moderate and less synchronised

The strength of the US economy

contrasts with moderation in China and

Europe

Divergence of US and EU monetary

policy from 2019

The Fed ends its cycle of

increases, while the ECB starts its

cycle and prepares to withdraw

liquidity

Increased financial tensions

in emerging markets

With clear differentiation among

countries, the most financially

vulnerable of them facing abrupt

adjustments in their economies

Global risks are intensifying

Added to protectionism and the Fed’s

normalisation are rising tensions in

emerging countries and increased

uncertainty in Europe

Trade war between the US and China

Impact still limited, but could increase if new

measures are taken and confrontation continues


Moderation of global growth

Slight moderation of global growth

towards rates slightly below 1%

QoQ in 2H18

Activity data remain solid, but

have lost momentum, probably as

a result of the increase in

protectionism weighing down on

confidence, trade and investment

Apart from volatility, world trade

has not been badly affected so far

World GDP growth(Forecasts based on BBVA-GAIN, % QoQ)

Source: BBVA Research

CI of 20% CI of 40% CI of 60%

Growth estimate Average for period

0,4

0,6

0,8

1,0

1,2

dic

.-1

3

jun

.-1

4

dic

.-1

4

jun

.-1

5

dic

.-1

5

jun

.-1

6

dic

.-1

6

jun

.-1

7

dic

.-1

7

jun

.-1

8

dic

.-1

8


The downward revision of growth in emerging economies explains

the expected moderation of global growth in 2019

Source: BBVA Research


02Mexico, Economic

Activity


GDP(% change, quarterly, annualised)

IGAE (Global Economic

Activity Index)(Index 2013/01 = 100)

More dynamic GDP growth in 3Q18, driven by services and

manufacturing

Source: BBVA Research / INEGI

(National Statistics Institute)

Industrial activity(Index 2013/01 = 100)

2.2

3.7

2.5

3.4

1.4

-2.7

3.9

2.22.6

5.2

1.5

4.4

2.2

4.3

5.2

-0.4

2.41.9

4.9

4.0

1.1

2.2

-0.3

3.3

4.0

-0.6

3.2

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

80

85

90

95

100

105

110

115

120

125

90

95

100

105

110

115

120

125

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Total Industry Services Primary Sector (right axis)

70

75

80

85

90

95

100

105

110

115

120

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Total Mining Utilities Construction Manufacturing


Gross Fixed Investment(Index 2013/01 = 100)

Construction

(Index 2013/01 = 100)

Private investment remains weak; possible delay in its recovery


Gross Fixed Investment(Index 2013/01 = 100)

90

95

100

105

110

115

120

125

130

135

140

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Total Machinery and Equipment - National

Machinery and Equipment - Imported Construction

85

90

95

100

105

110

115

120

125

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Residential Non-residential

60.0

70.0

80.0

90.0

100.0

110.0

120.0

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Public Private


Monthly Private

Consumption Indicator(Index 2013/01 = 100)

Formal employment(YoY%)

Private consumption remained buoyant in 3Q18


Total formal payroll(Index 2013/01 = 100)

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1 0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

85

90

95

100

105

110

115

120

125

130

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Total Domestic Goods Imported Goods Services


Workers by income level (Minimum wage intervals, %)

Minimum Annual Wage(Constant 2017 prices, USD PPP)

The increase in the legal minimum wage favours recovery of lowest-

paid workers’ purchasing power


Minimum Annual Wage(Constant 2017 prices, USD PPP;

index 2000 = 100)

We do not foresee inflationary pressures, given the small percentage of workers in the

formal economy on the minimum wage (3.3%) and the lack of domino effect on those

earning more than this. Nor do we expect any reduction in employment

16.2%

28.4%

18.1%

12.9%

4.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

1T

200

5

3T

200

5

1T

200

6

3T

200

6

1T

200

7

3T

200

7

1T

200

8

3T

200

8

1T

200

9

3T

200

9

1T

201

0

3T

201

0

1T

201

1

3T

201

1

1T

201

2

3T

201

2

1T

201

3

3T

201

3

1T

201

4

3T

201

4

1T

201

5

3T

201

5

1T

201

6

3T

201

6

1T

201

7

3T

201

7

1T

201

8

(0,1] (1,2] (2,3] (3,5] 5<

0

50

100

150

200

250

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

Mexico Costa Rica Colombia Chile Brazil

0

5,000

10,000

15,000

20,000

25,000

Lu

xem

bo

urg

Neth

erla

nds

Austr

alia

Germ

any

Belg

ium

Fra

nce

New

Ze

ala

nd

Ire

lan

d

UK

Can

ada

Kore

a

Spa

in

US

Slo

venia

Isra

el

Port

uga

l

Pola

nd

Tu

rkey

Gre

ece

Hun

gary

Slo

vak

Rep

.

Cze

ch R

ep.

Esto

nia

Lithu

ania

Costa

Ric

a

La

tvia

Colo

mb

ia

Chile

Bra

zil

Russi

an F

ed.

Mexi

co


Manufacturing exports(Index 2013/01 = 100)

Mexico and US, manufacturing exports(YoY%, moving 6-month average, Mexico 6-month lag)

Exports remain dynamic, and will continue to be driven by the

strength of the US manufacturing sector


80.0

90.0

100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

2012/0

1

2013/0

1

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Total Automotive Rest

30

35

40

45

50

55

60

65

70

75

80

-6

-4

-2

0

2

4

6

8

10

12

2014/0

1

2015/0

1

2016/0

1

2017/0

1

2018/0

1

Mexican Non-Oil Exports

ISM Manufacturing Production Index (right axis)


03Downward rigidity of core

inflation and restrictive stance of

Banxico (Banco de México, the

central bank)


Headline and core inflation(YoY % change)

Headline and energy inflation(YoY % change)

Fall in headline inflation in 4Q18 as we foresaw, although at a slower pace

than expected, due to recent pressure on agricultural prices


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Jan-1

6

Apr-

16

Jul-16

Oct-

16

Jan-1

7

Apr-

17

Jul-17

Oct-

17

Jan-1

8

Apr-

18

Jul-18

Oct-

18

Headline Core

-5.0

0.0

5.0

10.0

15.0

20.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Jan-1

6

Apr-

16

Jul-16

Oct-

16

Ja

n-1

7

Apr-

17

Jul-17

Oct-

17

Ja

n-1

8

Apr-

18

Jul-18

Oct-

18

Headline Energy


Core inflation breakdown(YoY % change)

Core goods inflation breakdown(YoY % change)

Core inflation stickiness on food core goods and services other than

education and housing


0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Jan-1

6

Apr-

16

Jul-16

Oct-

16

Jan-1

7

Apr-

17

Jul-17

Oct-

17

Jan-1

8

Apr-

18

Jul-18

Oct-

18

Core Goods Services

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Jan-1

6

Apr-

16

Jul-16

Oct-

16

Jan-1

7

Apr-

17

Jul-17

Oct-

17

Jan-1

8

Apr-

18

Jul-18

Oct-

18

Core goods Non-food Food


Headline inflation and trend(Chge. % YoY)

Core inflation and trend(Chge. % YoY)

In the short term we expect headline inflation to fall more markedly

than core inflation


0

1

2

3

4

5

6

7

8

9

10

Ja

n-1

6

Mar-

16

May-1

6

Jul-16

Sep

-16

No

v-1

6

Ja

n-1

7

Mar-

17

May-1

7

Ju

l-17

Sep

-17

No

v-1

7

Jan-1

8

Mar-

18

May-1

8

Jul-18

Sep

-18

No

v-1

8

Actual Trend*

0

1

2

3

4

5

6

7

Jan-1

6

Mar-

16

May-1

6

Ju

l-16

Sep

-16

No

v-1

6

Ja

n-1

7

Mar-

17

May-1

7

Jul-17

Sep

-17

No

v-1

7

Jan-1

8

Mar-

18

May-1

8

Ju

l-18

Sep

-18

No

v-1

8

Actual Trend*


Risk-adjusted carry trade(%)

Market-based long-term inflation expectations

and exchange rate (% and pesos to the dollar)

We expect Banxico to increase its base rate by 25 bps to 8.25% in

December, since risks for inflation continue to be biased upwards

Source: BBVA Research / INEGI Source: BBVA Research / Bloomberg

-

0.10

0.20

0.30

0.40

0.50

0.60

0.70

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Ja

n-1

6

Apr-

16

Jul-16

Oct-

16

Jan-1

7

Apr-

17

Jul-17

Oct-

17

Ja

n-1

8

Apr-

18

Jul-18

Oct-

18

MXN EM average

2.5

3.0

3.5

4.0

4.5

5.0

5.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

20.5

21.0

21.5

22.0

Jan-1

6

Mar-

16

May-1

6

Jul-16

Sep

-16

No

v-1

6

Jan-1

7

Mar-

17

May-1

7

Jul-17

Sep

-17

No

v-1

7

Jan-1

8

Mar-

18

May-1

8

Jul-18

Sep

-18

No

v-1

8

ER (lhs) 10-year breakeven inflation rate (rs)


Outlook for the monetary policy rate(Nominal, %)

Ex ante real monetary policy rate*(Chge. % YoY)

For 2019 we foresee the rate being held steady in 1H and cut by 50

bps to 7.75% in 2H

Source: BBVA Research / Banxico

* Own calculations based on 12-month inflation expectations from the Banxico analysts’ survey

and using our inflation expectations for projected data

Source: BBVA Research / INEGI / Banxico

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Jan-1

6

Apr-

16

Jul-16

Oct-

16

Jan-1

7

Apr-

17

Jul-17

Oct-

17

Jan-1

8

Apr-

18

Jul-18

Oct-

18

Jan-1

9

Apr-

19

Jul-19

Oct-

19

Observada Prevista

-1.0

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Jan-1

5

Apr-

15

Jul-15

Oct-

15

Jan-1

6

Apr-

16

Ju

l-16

Oct-

16

Ja

n-1

7

Apr-

17

Ju

l-17

Oct-

17

Ja

n-1

8

Apr-

18

Ju

l-18

Oct-

18

Ja

n-1

9

Apr-

19

Jul-19

Oct-

19

Actual Forecast


042019 public accounts and

budget


Total public sector budget revenue showed a real YoY decrease of

3.1% in the period January to October 2018

Stripping out Banxico’s Operating

Surplus from the year-on-year

comparison, total public revenues

would have registered a real

increase of 5.1% in the first ten

months of 2018

Oil revenues showed real annual

growth of 11.1% in the period

VAT contributed 2.0 percentage

points to the real annual variation

in tax revenues in the first ten

months of 2018, but this was

offset by the negative contribution

of gasoline and diesel tax of 1.8

percentage points.

Public sector budget revenues and

components in the period Jan. to Oct. 2018(real annual change %)

Source: BBVA Research based on data from SHCP

-3.1

1.9

-24.6

5.1 3.9

11.1

-5.9

-30

-25

-20

-15

-10

-5

0

5

10

15

Tota

l

Tax r

evenue

No

n-t

ax r

even

ue

Org

an

izations a

nd fir

ms

under

budgeta

ry c

ontr

ol

Sta

te-o

wned p

roductive

ente

rprise

s

Oil

revenue

No

n-o

il re

venue


Total net spending showed a real annual increase of 5.2% in the

period January to October 2018

Programmable and non-

programmable expenditure each

made similar contributions of 2.6

percentage points to the increase

in total spending in the period

January to October 2018.

Current expenditure showed a

real annual increase of 5.5% in

the ten-month period.

The financial cost of public debt

contributed 4.3 pp to the 10.1%

growth in non-programmable

spending in the same period.

Public sector paid net expenditure and

components in the period Jan. to Oct. 2018(real annual change %)


(Secretariat of Finance and Public Credit)

5.2 3.5 5.5

-4.8

10.1 2.812.3

179.3

-50

0

50

100

150

200

Tota

l

Dis

cre

tionary

spen

din

g

Cu

rrent spen

din

g

Ca

pital spendin

g

No

n-d

iscre

tionary

spe

ndin

g

Re

venue s

haring w

/ sta

tes

De

bt serv

ice

De

bt fr

om

pa

st fiscal years


The federal government reduced its commitment to fiscal

consolidation in January-October 2018

Stripping out financial investment,

federal contributions to the states,

public pensions and financial cost,

the real annual increase in

spending would be 7.3% in the

first ten months of 2018.

The pattern of this limited

measure of expenditure shows

that the federal government

reduced its fiscal consolidation

efforts in the period.

Public spending indicators in

January-October 2018 (real annual change %)


5.2

6.77.4

8.07.3

0

1

2

3

4

5

6

7

8

9

Tota

l net sp

endin

g

W/o

fin

ancia

l in

vestm

ent

W/o

fin

. in

ve

st. a

nd r

ev.

sh

ar.

W/o

fin

. in

vest., re

v. shar.

and p

en.

W/o

fin

. in

vest., re

v. shar.

,pen. a

nd d

ebt serv

ice


The federal government looks set to reach its target primary surplus

of 0.8% of GDP in 2018

The primary surplus in January-

October 2018 was largely due to

the balances of the IMSS and the

ISSSTE. (private and public

sector health and social services

institutions, respectively)

The primary surplus in January-

October 2018 shows 85%

attainment of the target of 0.8% of

GDP for 2018.

Primary balance and components in

January-October 2018(MXN billions)


188.1

160.3

16.8

132.7

10.8

0

20

40

60

80

100

120

140

160

180

200

2018 p

rim

ary

ba

lance ta

rget

Prim

ary

bala

nce

Fede

ral go

vern

ment

Org

. a

nd e

nte

rprises

Int. u

nder

indirect contr

ol


We expect public debt as a % of GDP to increase marginally in 2018

and hold steady in 2019

The depreciation of the peso seen

in the fourth quarter of the year

will cause the SHRFSP (stock of

public debt) as a % of GDP to

increase from 46.0% in 2017 to

46.2% in 2018.

We expect this broad measure of

public debt to remain stable in

2019 at around 46.6%.

Historical balance of public sector borrowing

requirements(% of GDP)


48.7

46.046.2

46.6

20

25

30

35

40

45

50

55

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

BBVA Research forecasts

for 2018-2019


The federal government passes its first big test by basing its 2019

fiscal budget on reasonable economic assumptions

The fiscal package is solid in

macroeconomic terms, but it

introduces some distortions at

microeconomic level.

It is based in reasonable

economic assumptions in line with

those of the market

Revenue and expenditure

projections are conservative.

As we expected, market reaction

has been slightly positive.

Economic assumptions for the 2019 fiscal

budget


2019

GDP

YoY % real growth (interval) 1.5 - 2.5

Point forecast 2.0

Nominal (thousands of millions of pesos) 24,942.1

Deflator 3.9%

Inflation 3.4%

Nominal exchange rate

End of period 20.0

Average 20.0

Nominal interest rate

End of period 8.30%

Average 8.30%

Current account

Millions of USD -27,326

% of GDP -2.2

Crude oil

Average price (USD/barrel) 55

Average production (mbd) 1,847

Average exports (mbd) 1,016


Lower economic growth could translate into a smaller primary

surplus if the federal government did not adjust its spending plans

The federal government has set a

target of 1.0% of GDP for the

primary surplus in 2019.

However, lower economic growth

could reduce the primary surplus

through its impact on tax

revenues.

Also, in an adverse economic

scenario, the federal government

would have to opt to attain its

fiscal target by reducing approved

expenditure.

Economic growth and primary balance (change % YoY and % of GDP)


2.0

1.8

1.6

1.4

1.2

1.01.0

0.8

0.6

0.3

0.1

-0.1

-0.5

0.0

0.5

1.0

1.5

2.0

2.5

Real GDP growth Primary balance


Collection of IEPS excise tax on fuel will have to increase by 42% in

real annual terms for tax revenues to grow by 3.8%

The freezing of domestic real

prices of gasoline and diesel for

next year, together with the stable

or lower international prices of

these fuels should help to

increase fuel tax revenues, but

uncertainty persists as to whether

this objective will be attained.

As for the tax cuts in

municipalities along the border

with the US, this is a serious

political mistake, which will lead to

reduced tax revenues and

significant distortions.

Tax revenues with and without IEPS excise tax

on fuel(real % YoY change)


1.9

3.83.9

1.4

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

January-October 2018 2019

Tax revenue Tax revenue w/o fuel taxes


05External accounts


The current account deficit fell marginally in the first nine months of 2018 relative

to the same period of 2017; we estimate that it will end the year at 2.0% of GDP

The current account deficit fell to

US$17,020 million in the first nine

months of 2018 from US$17,151

million in the same period of 2017

This is explained mainly by: i) the

increased surplus in the balance

of secondary revenues and ii) the

increased surplus in the balance

of non-oil goods

However, the deficit in oil and

petroleum products was

US$16,323 million in the nine

months the end of 3Q18 as

opposed to US$13,263 million in

the same period of 2017.

Current account(US$ million)

Source: BBVA Research based on Banxico figures

-12,000

-10,000

-8,000

-6,000

-4,000

-2,000

0

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18


The surplus in the agriculture and livestock sector kept the overall trade

balance of non-oil goods positive in the nine-month period

The trade deficit increased to

US$10,348 million in the first nine

months of 2018, from US$9,116

million in the same period of 2017.

This was due mainly to the

increased deficit in the trade

surplus for oil and petroleum

products (US$16,323 million in

January-September 2018,

compared with US$13,263 million

in the same period of 2017)

We expect the trade deficit for

2018 to be US$14 billion,

equivalent to 1.2% of GDP

Trade balance and principal components(US$ million)

Source: BBVA Research based on INEGI data

-8,000

-6,000

-4,000

-2,000

0

2,000

4,000

6,000

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

4Q

16

1Q

17

2Q

17

3Q

17

4Q

17

1Q

18

2Q

18

3Q

18

Manufacturing Oil sector Others Trade balance


06Domestic assets are being

affected by the new

administration’s decisions


Currency depreciation deriving from the uncertainty generated by the

new administration’s decisions

The peso was the currency that

depreciated most in 4Q (6.93%).

The responsible budget will limit

the weakness in the next few

weeks, but the risks remain

Exchange rate(Pesos per dollar)

Source: BBVA Research based on Bloomberg data

17.5

18.0

18.5

19.0

19.5

20.0

20.5

21.0

Ma

r-1

8

Ma

r-1

8

Ma

r-1

8

Apr-

18

Apr-

18

Ma

y-18

Ma

y-18

Jun-1

8

Jun-1

8

Jul-1

8

Jul-1

8

Aug

-18

Aug

-18

Aug

-18

Sep

-18

Sep

-18

Oct-

18

Oct-

18

Nov-1

8

Nov-1

8

Dec-1

8

Dec-1

8

intentions on NAFTA preliminary agreement

Tariffs on steel & aluminum

Elections

NAIM Cancellation

Volatility EM

PEMEX outlook downgrade

Proposal on banking comissions

Budget


Sovereign risk [5-year CDS spread] (Index January 2018 = 100)

Sovereign risk [5-year CDS spread] at 17

December 2018 (basis points)

Mexico’s sovereign risk is trading at similar levels to those of

countries rated two notches lower


70

80

90

100

110

120

130

140

150

Dec-1

7

Jan-1

8

Fe

b-1

8

Ma

r-1

8

Ma

r-1

8

Apr-

18

Ma

y-18

Ma

y-18

Jun-1

8

Jul-1

8

Jul-1

8

Aug

-18

Sep

-18

Sep

-18

Oct-

18

Nov-1

8

Thailand Mexico Peru

Panama Colombia Philippines

BBB

BBB+

BBB

BBB+

BBB+

BBB-

BBB-

BBB+BBB-

BBB BBB+

BBB

BBB+

0

20

40

60

80

100

120

140

160

180

Russi

a

Me

xico

Colo

mbia

Peru

Phili

ppin

es

Pan

am

a

Th

aila

nd


Government 10-year interest rates, USA

and Mexico (%)

Government bond yield curve(%)

Increased sovereign risk and more restrictive monetary policy lead

to higher long-term interest rates


Even though the budget had an effect on the fall in yields, the level attained in the

ten-year range is the highest since 2009

2.8

2.9

2.9

3.0

3.0

3.1

3.1

3.2

3.2

3.3

3.3

7.55

7.75

7.95

8.15

8.35

8.55

8.75

8.95

9.15

9.35

Jul-1

8

Jul-1

8

Jul-1

8

Aug

-18

Aug

-18

Sep

-18

Sep

-18

Oct-

18

Oct-

18

Nov-1

8

Nov-1

8

Dec-1

8

Dec-1

8

M10 (LHS) T10 (RHS)

EM turmoi lFi tch downgrades

PEMEX

NAIM cancellation

Budget

7.8

8.0

8.2

8.4

8.6

8.8

9.0

9.2

9.4

3Y 5Y 10Y 20Y

Oct 12 Oct 26 Oct 29 Dic 17 Dic 19

NAIM cancellation

Budget


Monthly change in foreigners’

holdings of bonds(US$ millions)

Holdings of CETES (Federal Treasury

certificates) and M-bonds by foreigners (% of total)

Despite the uncertainty, foreigners are maintaining their positions in

medium- and long-term bonds


0

10

20

30

40

50

60

70

Ma

y-06

Nov-0

6

Ma

y-07

Nov-0

7

Ma

y-08

Nov-0

8

Ma

y-09

Nov-0

9

Ma

y-10

Nov-1

0

Ma

y-11

Nov-1

1

Ma

y-12

Nov-1

2

Ma

y-13

Nov-1

3

Ma

y-14

Nov-1

4

Ma

y-1

5

Nov-1

5

Ma

y-16

Nov-1

6

Ma

y-1

7

Nov-1

7

Ma

y-18

Nov-1

8

CETES MBonds

QE3

QE2& WGBI

Tapering

-2000

-1500

-1000

-500

0

500

1000

1500

2000

Jan-1

8

Fe

b-1

8

Ma

r-1

8

Apr-

18

Ma

y-1

8

Jun-1

8

Jul-1

8

Aug

-18

Sep

-18

Oct-

18

Nov-1

8


Disclaimer

This document was prepared by Banco Bilbao Vizcaya Argentaria’s (BBVA) BBVA Research and BBVA

Bancomer S. A., Institución de Banca Múltiple, Grupo Financiero BBVA Bancomer on behalf of itself and is

provided for information purposes only. The information, opinions, estimates and forecasts contained

herein refer to the specific date and are subject to changes without notice due to market fluctuations. The

information, opinions, estimates and forecasts contained in this document are based upon information

available to the public that has been obtained from sources considered to be reliable. However, such

information has not been independently verified by BBVA Bancomer, and therefore no warranty, either

express or implicit, is given regarding its accuracy, integrity or correctness. This document is not an offer to

sell or a solicitation to acquire or dispose of an interest in securities.


Mexico

Economic Outlook

Fourth quarter 2018

mexico economic outlook 4q18 - bbvaresearch.com · bbva research –mexico economic outlook 4q18 /...

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