Moody’s Investor Service cut its estimate for real growth in gross domestic product of Mexico, 1.9 percent for 2017; And 2.3 percent by 2018, after it also revised down its estimated rate for this year, now 2 percent.
In a report, the ratings agency said the revisions reflect its outlook that investment growth is likely to weaken due to heightened uncertainty over the future of US trade relations.
The reports says that among Latin American countries, Mexico ranks fifth in terms of exposure to foreign direct investment and remittances, reflecting strong ties with the United States.
Moody’s considered that there are significant downside risks stemming from a change in US trade policy or a potential renegotiation of the North American Free Trade Agreement, which could lead to negative and trustworthy trade for Mexico.
He indicated that exports to the United States represented on average more than 20 percent of Mexico’s GDP during the period from 2010 to 2015, where high-value manufacturing products accounted for 56 percent of these exports.
US foreign direct investment in the country was close to one percent of GDP, but more than 50 percent is destined for manufacturing.