Mexico – October Trip Notes

“Todo es visible y todo es elusivo, todo está cerca y todo es intocable” - Octavio Paz (poema Entre Irse y Quedarse) Despite the passage of the judicial reform, we are somewhat more optimistic about the investment climate, given the likely push by the current administration to rely on public-private structures to finance power generation projects. With regards to Banxico , we now believe that the threshold for accelerating the pace of cuts to 50 bps is somewhat lower than we thought. However, an acceleration in the pace of cuts would require a slowdown in economic activity and core inflation . Fiscal risks have emerged as the most immediate and potentially the most pressing risk , given their impact on rating agency assessments.