Mexico economy to slow as NAFTA talks drag on

Mexico’s economy will slow next year as talks on the renegotiation of the North American Free Trade Agreement (NAFTA) drag on, according to the IMF.

In its latest report on the US’ southern neighbour, the IMF predicted the Mexican economy would grow by 1.9% in 2018 versus 2.1% this year.

“Prolonged NAFTA-related uncertainty along with political uncertainty and tighter monetary conditions will increasingly weigh on private consumption and investment, particularly in the export-oriented manufacturing sector,” said the IMF report.

Inflation to ease

On the bright side, the Washington-based organisation also claimed that Mexico’s inflation rate would significantly slow next year, moving towards the central bank’s 3% target.

Higher energy costs and earthquake related costs pushed Mexico’s annual inflation rate up to 6.37% last month.