Mexico’s economy is growing at a slow but steady pace, with an unemployment rate of less than 1% and the economy expected to expand by more than 5% in 2017, according to the latest GDP figures from the International Monetary Fund.
“The Mexican economy is in a good place,” IMF Deputy Managing Director Ricardo Cardoso said in a statement.
While the country’s economic growth is slower than expected, it is growing by 7.4% in the first quarter of this year.
The country’s exports to China, the world’s largest trading partner, also rose slightly in the same period, but the IMF sees an even stronger rebound in the second quarter.
Mexico’s GDP growth rate of 7.5% was far below the IMF’s forecast of 6.9% and below the 3% average of OECD countries, the report said.
In 2015, Mexico’s trade surplus with China reached $3.4 billion, which was more than three times that of the UK and three times the $1.9 billion in the Netherlands, according the IMF.
A big question mark surrounds Mexico’s future economic policy.
Mexico’s President Enrique Pena Nieto’s government is expected to seek a bigger role in international affairs, including addressing the threat of global climate change, and the IMF said the country is likely to seek aid from the IMF for the first time in its history.
But the country also needs to address its chronic unemployment rate, which is at 12.5%, the IMF added.
Meanwhile, the IMF expects Mexico’s current account deficit to be nearly 8% of GDP this year, the lowest since 1998, and it also expects its growth rate to decline.
Mexican GDP growth was 1.6% in 2015 and will likely slow to 1.5%-1.6%, according to Moody’s Analytics.
Moody’s said Mexico is likely not to be able to maintain its current account surplus of $2.9 trillion in 2021, and may face an adjustment of its debt burden to a higher level than that of countries such as Spain, Portugal and Italy.