Mexico’s Finance Minister ‘reasonably confident’ about fiscal projections – El Financiero

By: bitcoin ethereum news|2025/05/13 07:45:06
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Mexico’s Finance Minister Edgar Amador noted that he is “reasonably confident” about the Treasury’s fiscal and growth projections for the year. El Financiero reported that the Ministry of Finance’s economic growth projections anticipate a healthy 1.9% growth in 2025, contrary to the estimates of a near stagnation, according to most analysts Amador added that he is “reasonably confident” about the Treasury’s fiscal and growth projections for the year. However, he warned that if the government misses its budgetary target, it is expected to maintain a restrictive stance, even if the economy hits a recession in the second half of 2025. The finance minister stated that the relationship between the US and Mexico offers preferential treatment, with USMCA-compliant goods exempt from taxation. Amador recognizes a closed mid-term outlook for growth and public finances, adding that he expects a recession in H2. Mexican Peso FAQs The Mexican Peso (MXN) is the most traded currency among its Latin American peers. Its value is broadly determined by the performance of the Mexican economy, the country’s central bank’s policy, the amount of foreign investment in the country and even the levels of remittances sent by Mexicans who live abroad, particularly in the United States. Geopolitical trends can also move MXN: for example, the process of nearshoring – or the decision by some firms to relocate manufacturing capacity and supply chains closer to their home countries – is also seen as a catalyst for the Mexican currency as the country is considered a key manufacturing hub in the American continent. Another catalyst for MXN is Oil prices as Mexico is a key exporter of the commodity. The main objective of Mexico’s central bank, also known as Banxico, is to maintain inflation at low and stable levels (at or close to its target of 3%, the midpoint in a tolerance band of between 2% and 4%). To this end, the bank sets an appropriate level of interest rates. When inflation is too high, Banxico will attempt to tame it by raising interest rates, making it more expensive for households and businesses to borrow money, thus cooling demand and the overall economy. Higher interest rates are generally positive for the Mexican Peso (MXN) as they lead to higher yields, making the country a more attractive place for investors. On the contrary, lower interest rates tend to weaken MXN. Macroeconomic data releases are key to assess the state of the economy and can have an impact on the Mexican Peso (MXN) valuation. A strong Mexican economy, based on high economic growth, low unemployment and high confidence is good for MXN. Not only does it attract more foreign investment but it may encourage the Bank of Mexico (Banxico) to increase interest rates, particularly if this strength comes together with elevated inflation. However, if economic data is weak, MXN is likely to depreciate. As an emerging-market currency, the Mexican Peso (MXN) tends to strive during risk-on periods, or when investors perceive that broader market risks are low and thus are eager to engage with investments that carry a higher risk. Conversely, MXN tends to weaken at times of market turbulence or economic uncertainty as investors tend to sell higher-risk assets and flee to the more-stable safe havens. Source: https://www.fxstreet.com/news/mexicos-finance-minister-reasonably-confident-about-fiscal-projections-el-financiero-202505122059

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