Mexico is confronting a complex external environment characterized by heightened risk of trade protectionism and financial markets volatility. Real GDP growth is projected to moderate to 2.1 percent in 2016, with inflation remaining close to the 3-percent target. Looking ahead, the expected recovery in external demand and investment should support economic activity. The main risks include a rise in global protectionist tendencies, weaker-than-projected growth in the United States, renewed surge in capital flow volatility, and further decline in domestic oil production.
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