Mexico’s government predicted Thursday that the country will see its economy grow 2.5 per cent next year and the peso strengthen a bit.
The federal 2017 budget proposal predicted GDP growth could range between 2 per cent and 3 per cent. It projected an exchange rate of 18.20 pesos to $1, which would be an improvement from Thursday’s interbank rate of 18.54 to $1.
The Treasury Department projected an average per-barrel price for Mexico’s crude oil of $42. That is above Thursday’s $39.79 price for Mexico’s market basket of crudes, but in line with coverage contracts Mexico has already purchased.
But lower output forecast in the budget would leave only about 775,000 barrels a day of crude for export, down from about 1.13 million barrels as of mid-2016. Mexico’s oil production is projected to fall to about 1.93 million barrels a day from about 2.18 million barrels a day in the second quarter of 2016.
The Treasury Department said inflation should run at about 3 per cent in 2017.