In February 2019, Mexico’s central bank shaved its 2019 economic growth outlook from between 1.7%–2.7% to between 1.1%–2.1%, based on inflationary pressures and slow growth in the fourth quarter of 2018. More recently, rating agencies have put Mexico’s outlook on a negative trend. At the same time, Mexico has a new government that is enacting change, which has created some uncertainty among the Mexican population. This concern is reflected in a 0.2% decline in Mexico’s GDP in the first quarter of 2019 — the first trimester of the new federal administration.
It is noteworthy, therefore, that the current EY M&A survey suggests that Mexican businesses are feeling optimistic about the economic landscape, the M&A market and their growth prospects in the coming year. According to the latest edition of the EY Global Capital Confidence Barometer, almost all of the Mexican respondents (98%) express confidence that the economy is improving, both at the global and local levels. Optimism across the spectrum of fundamentals — corporate earnings, short-term market stability, credit availability and equity valuations — supports this sentiment.