MEXICO: ECONOMY SHRINKS IN 2019

Mexico’s economy contracted by 0.3 percent in the final three months of 2019 compared to the same period in 2018.
The contraction, the first in 10 years, occurred during the inaugural year in office of leftist president Andrés Manuel López Obrador.
The number concerned analysts, many of whom expected a less severe shrinkage.
The country’s economy contracted in the last quarter of 2018 and first two quarters of 2019. Growth was flat in the last two quarters of 2019, despite Obrador’s promise of a 2-percent growth rate.
If the economy grows this year, the improvement will be modest at best.
The IMF has trimmed its 2020 forecast for Mexico’s growth from 1.3 to 1 percent; last week, Barclay’s cut its outlook from 1.4 to 0.6 percent for this year.
TREND FORECAST: While the IMF forecasts that Mexico’s economy will accelerate to 1.3 percent in 2020 “on the back of a modest recovery in domestic demand as uncertainty subsides and monetary conditions ease further,” we disagree. 
Considering a worsening global economic slowdown, we forecast the downside economic risk is greater for Mexico than the IMF’s prediction for growth. Furthermore, as the U.S. ramps up its attempts to overthrow the Venezuelan government… and riots, demonstrations, strikes, and protests accelerate throughout Latin and South America, Mexico will be flooded with refugees seeking to make their way north to escape violence and poverty.