MEXICO CITY Nov 14 HSBC and Santander on Monday
both cut their growth outlook for Mexico next year on
expectations that Donald Trump's rise to the U.S. presidency
could hit investment and consumer confidence in Latin America's
Both banks said Mexican gross domestic product would expand
about 1.7 percent in 2017. HSBC had previously forecast a 2.3
percent expansion, while Santander had a 2.2 percent rate.
Rating agency Moody's cut its 2017 GDP forecast to 1.9
percent from 2.5 percent on Monday.
Trump has threatened to unwind a free trade deal with Mexico
and to block money sent home by migrant workers in the United
States to pay for a wall on the border between the two
Mexico sends around four-fifths of its exports to the United
States, its top trading partner. U.S.-Mexico trade totaled more
than $580 billion last year.
"The result of the U.S. election is likely to have a
significant impact on economic activity in Mexico in the coming
years," HSBC economist Alexis Milo wrote.
A poll last week by Banamex before the outcome of the U.S.
election had shown median expectations were for a 2.3 percent
expansion of GDP next year. The economy grew 2.5 percent last
year and is on track to grow about 2.1 percent this year,
according to the Banamex poll.
Milo said the negative impact next year would likely be only
moderate since any changes to trade could take some time to
implement. He revised down his outlook mostly due to the
expectation of less domestic and foreign investment in Mexico.
Santander said it revised its forecast lower on expectations
of a slowdown in exports and private consumption.
"Trade protectionism may not be the top priority but some
restrictions are very likely to emerge sooner or later and will
have a direct impact on growth on both sides of the border,"
said Santander economist David Franco.
(Reporting by Michael O'Boyle; Editing by Alan Crosby)