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Mexico predicts 2.5 pct GDP growth, stronger peso for 2017

WT24 Desk

Mexico City— Mexico’s government predicted Thursday that the country will see its economy grow by about 2.5 percent next year and the peso strengthen a bit, AP reports.

The federal 2017 budget proposal predicted GDP growth could range between 2 percent and 3 percent, compared to an expected increase this year of about 2.3 percent. It projected an exchange rate of 18.20 pesos to $1, which would be an improvement from Thursday’s interbank rate of 18.54 to $1.

The Treasury Department projected an average per-barrel price for Mexico’s crude oil of $42. That is above Thursday’s $39.79 price for Mexico’s market basket of crudes, but in line with coverage contracts Mexico has already purchased.

But lower output forecast in the budget would leave only about 775,000 barrels a day of crude for export, down from about 1.13 million barrels as of mid-2016, resulting in a 15.7 percent drop in government oil income compared to this year. Oil production is projected to fall to about 1.93 million barrels a day from about 2.18 million barrels a day in the second quarter of 2016.

The Treasury Department said inflation should run at about 3 percent in 2017.

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