20181016-法国巴黎银行-MEXICO_–_2018_KEY_DATES,_KEY_VIEWS_7页_631kb

Mexico - 2018 Key Dates and Key Views Summary

Core Content Overview

This report provides an analysis of key economic events and views in Mexico for the remainder of 2018 and into 2019, focusing on monetary policy, the new Mexico City airport project, and the 2019 fiscal package. It also outlines the implications of the minimum wage increase on inflation and the broader economic outlook.

Key Economic Events and Views

1. Monetary Policy

• 18 October 2018: Banxico released the minutes of its last policy meeting. Despite not following the Fed, the central bank maintained a hawkish bias, suggesting the potential for a rate hike in the future.
• 15 November 2018: Banxico will hold its next policy meeting, giving it an opportunity to evaluate core inflation patterns and other economic indicators before making any policy decisions.
• 20 December 2018: Another monetary policy meeting is scheduled, with the central bank likely to assess further inflation data and market expectations.
• View: A rate hike in November is not expected, but future decisions will depend on core inflation trends and upcoming data releases.

2. New Mexico City Airport Project

• 25–28 October 2018: A public consultation will take place where citizens will vote on the future of the new airport in Texcoco. The two options are:
  1. Continue with the current project, which is already 34% complete.
  2. Cancel the Texcoco project and expand existing airports (Santa Lucia and Toluca).
• View: The public consultation is expected to maintain the status quo, with private polls showing over 60% support for continuing with the Texcoco project. AMLO's team is setting up voting stations in 538 municipalities, likely covering 80% of the population.

3. 2019 Fiscal Package

• 15 December 2018: AMLO's team is expected to submit the 2019 budget proposals to Congress for approval. The proposals are expected to be market-friendly, implying a primary surplus and no increase in public debt.
• 31 December 2018: Congress must approve the fiscal package by this date.
• View: Although the fiscal package is expected to be market-friendly, significant spending pressure is already anticipated in the 2019 budget, which could affect economic stability.

4. Minimum Wage Increase (2019)

• AMLO has proposed a 100% increase in the minimum wage in the northern border states, with the opposition pushing for a nationwide increase starting in January 2019.
• The original plan involves a gradual increase over AMLO's six-year term.
• View: The minimum wage hike is likely to be gradual, but will still result in a double-digit annual increase. Inflationary pressures will depend on the magnitude and coverage of the adjustment, along with new social spending initiatives.

Key Information

• Banxico's Policy Outlook: The central bank is maintaining a cautious approach, with the next policy meeting in November offering an opportunity to reassess inflation data and expectations.
• Public Consultation Outcome: Expected to support the continuation of the Texcoco airport project, with strong private poll support.
• Fiscal Policy Implications: The 2019 budget is anticipated to include significant spending, which could pose challenges for fiscal balance and debt management.
• Minimum Wage Impact: While the pass-through to inflation is expected to be small, the combination of wage increases and new social reforms could create inflationary risks.

Conclusion

The year 2018 presents a series of important economic events in Mexico, including the public consultation on the new airport, the release of Banxico's policy minutes, and the submission of the 2019 fiscal package. The outlook for monetary policy remains cautious, with a potential for future rate hikes depending on inflation trends. The minimum wage increase, although gradual, is expected to have a noticeable impact on the economy, especially in conjunction with new social spending. The overall economic environment is seen as stable but with underlying risks that need careful monitoring.

Note: This document contains important disclosures and is intended for professional clients and relevant persons only. It is not investment research and may contain marketing communications or research content that is subject to the MiFID II rules. Readers are advised to consult independent financial advisors and ensure they are within the scope of applicable regulations before acting on the information provided.