Mexico's real GDP contracted -0.3% yoy1 in 4Q19 – dipping further after the -0.2% of 3Q19. Private consumption has begun to show signs of improvement following two policy rate cuts in the fourth quarter, but real interest rates remain high; a drop in gross fixed investments hindered growth output due to trade policy uncertainty, and due to what seems to be a crowding out effect from government policies. Exports continue a path of moderation partially attributable to a stronger peso in the final months of the year.
AMLO rounds up first year as president with disappointing growth.
We continue to lower our projections, but we expect growth to accelerate starting in 2020
Inflation remains properly anchored and we expect three rate cuts from the central bank in 2020.
Life premiums continue to outpace non-life lines.
Gains in the non-life loss ratios were offset by losses in the life segments; investment results continue to support profitability.
Following higher than expected premium growth in 2019, we expect a moderation come 2020.