Santander Lowered Forecast for the Mexican Economy

Dec. 24, 2013 - PRLog -- Grupo Financiero Santander revised down its growth expectations of the Mexican economy for next year, as internal factors that recovery will be slower than expected. The Santander Mexico estimates that by 2013 the growth of the Mexican economy will end at 1.2 percent, instead of the previous estimate of 1.5 percent, while in 2014 it stood at 3.0 percent from 3.8 percent in the previous forecast.

This downward revision explained, considering that while there is an improved outlook for the U.S. economy to promote non-oil exports, domestic factors have been observed or slower than anticipated poor performance and recovery will be also modest than estimated for 2014. In an analysis also has been exposed the poor performance of the construction sector, in relation to the issues of infrastructure and residential building.

This plus the fact that companies are looking to adapt to the new guidelines of the policy of building affordable housing and, without seeming to significantly reduce the current stock, which "suggests that the recovery will take longer than expected" .

Furthermore, continued public investment (both public and states and municipalities) has lagged considerably, during the first quarter dropped 6.6 percent per year and the second quarter contraction was 8.2 percent per year . in the case of public sector investment, this is just beginning to recover, but then lags are observed in public procurement and, therefore, in the implementation of investment projects in infrastructure.

Thus the contraction in the construction sector has been opposed to the new trend of recovery in the manufacturing sector as a whole by weakening the performance of the industrial sector, he explained. For Santander in Mexico, the contraction in the construction sector has been joined by a cautious consumer spending, resulting in lower dynamic of final sales and some branches of manufacturing and services domestically oriented.

It states that while employment continues to rise and in recent months has been an improvement in the balance so far this year the pace of payroll expansion was notably lower than that observed in the previous year.

Banco Bantander Mexico profile: http://mxbanks.com/banks/santander-bank-mexico