Wednesday, January 04, 2017

Mexico's 2017 Is Not Starting Well

The year is only four days old, but already looks to be a bad one for Mexico, and Donald Trump is in the middle of it.

--Deregulation has pushed gas prices up, which has prompted protests. Prices could go up by 20% over January. The timing seems terrible, but speculation is that the government wanted an influx of cash in anticipation of the Trump administration.

--After being bullied by Donald Trump, Ford announced it would cancel plans for a $1.6 billion plant in San Luis Potosí. There is reason to fear that companies will hesitate to invest, at least for now, because Trump will tweet at them. But overall, concern about NAFTA being tinkered with will likely slow investment from all countries

--The peso dropped to its lowest point in seven weeks.

On the flip side, concern about Trump has made remittances soar, which at least is positive in the short term but not sustainable. We'll have to see after January 20 how that changes.

Enrique Peña Nieto has a 29% approval rating, with 65% disapproval. That's already bad but watch it go lower.


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