MEXICO CITY – The head of the Mexican subsidiary of Spain’s Banco Santander said on Tuesday that the bank expects Mexico’s gross domestic product will grow this year by between 2.5 percent and 2.6 percent despite volatility in the global economy.
“We are at ease and cautiously optimistic that the situation in Mexico will be fine,” Banco Santander Mexico Hector Grisi said.
He called the 2.8 percent growth posted in the first quarter encouraging and forecast that consumption and credit will continue to grow, powering the Mexican economy to an expansion in the range of 2.5-2.6 percent, similar to last year’s performance.
Grisi noted, however, that markets “are volatile” and that the affects of negative interest rates in Japan and Europe on the Mexican economy remain to be seen.
He also pointed to the impossibility of predicting what will happen when central banks begin to tighten monetary policies.
Mexico’s central bank began tightening in February, increasing the one-day interbank interest rate by 50 basis points to 3.75 percent.
Last Friday, the Mexican government adjusted downwards its forecast for economic growth in 2016 to a range of between 2.2 percent and 3.2 percent.