Mexico GDP Outlook Brightens

Bank of America-Merrill Lynch (BAML) has boosted its forecast for Mexico’s GDP growth to 4.0% in 2010, an improvement of its previous forecast of 3.0%. BAML cites a stronger-than-expected recovery in the country’s manufacturing sector. “This year’s recovery will be an external demand led recovery as Mexico’s industrial sector follows the auto-led manufacturing rebound in the US,” says BAML. The recovery is from a low base. Mexico’s GDP contracted 6.5% in 2009. Goldman Sachs has also improved its 2010 GDP growth forecast to 5.0% from 4.2% previously, as government statistics show better-than-expected 4Q09 GDP growth. While Goldman Sachs expected 1.5% expansion, actual growth came out at 2.0% for the quarter. Mexico’s treasury last week revised upwards its GDP growth projection for 2010 to 3.9% from 3.0%.