IMF raises growth projection for Mexico

The International Monetary Fund (IMF) improved Mexico 's forecast for economic growth this year, revising the projection from 1,7% to 1,9%.

By 2018 , the international organization left unchanged expectations of the country's gross domestic product (GDP), which is expected to expand by 2% .

The projection of the financial institution based in Washington, United States , is in line with the ranks of both the Ministry of Finance and Public Credit (SHCP) and the Bank of Mexico , which expect the national GDP to be between 1,5% and 2,5% in 2017.

In the case of 2018 , it is also within the margin of what the country's fiscal and monetary authorities anticipate. As for the Ministry of Finance , the range it manages for GDP next year is 2% to 3% , while the central bank ranges from 1,7% to 2,7% .

When presenting its report on the World Economic Outlook (WEO), the international agency stressed that the recovery of global activity is becoming stronger.

However, it left the projections of global GDP unmoved. By 2017 forecasts the world economy to advance 3,5% and next year 3,6% . Both figures are similar to the forecasts it released in WEO last April.

Mexico stood out among a group of countries where the IMF sees a better economic outlook for the rest of the year.

The nations in which the 2017 GDP adjustment was most favorable were Canada, Italy, and Spain . In the case of Canada , the projection of its economic growth went from 1,9% to 2,5% , an improvement of 0.6 percentage points , while the two European countries were revised with a rise of 0.5 points . The Italians will advance 1,3% and the Spanish 3,1% .

"The cyclical recovery continues. Growth levels reached in the first quarter of 2017 exceeded forecasts in the April WEO report in large emerging and developing economies such as Brazil, China, and Mexico , as well as in several advanced economies such as Germany, Canada, Spain, France, and Italy ," it informed.

The IMF noted that risks around global growth forecasts appear to be well-balanced in the short term and in the middle continue to trend downwards .

"On the positive side, the cyclical reactivation could be more vigorous and more sustained in Europe , where the political risk has reduced.”

"On the negative side, high market valuations and the fact that volatility is at very low levels within an environment of marked policy uncertainty increases the likelihood of a market correction, which could tarnish growth and confidence ," the report said.

The IMF considered that the greater support provided by China's economic policy , manifested mainly in a vigorous expansion of credit, implies that the downside risk for growth in the medium term has increased.

It stressed that the normalization of monetary policy in some advanced economies, especially in the United States , could strain international financial conditions faster than expected.

In addition, other risks discussed in the last April issue of the WEO report, such as the shift to isolationism and geopolitical risks , remain prominent.

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