The impact of the sayings of Trump They will be for the exchange rate, he stated Carlos Serranochief economist of the BBVA Mexicobut stated that the commercial integration of North America It is already very deep and will not be reversed by threats of tariffs.
Serrano pointed out that the impact rather than breaking relations will be for rates, the peso and perhaps the economy.
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“what we are anticipating, the central part, I would point out that the commercial integration of North America is already very deep and that it is not going to be reversed. This deepening will continue, and what there may be are these changes in exchange rate and rate issues, but structurally North America will continue to be highly integrated.”
when submitting the report Mexico SituationSerrano said that BBVA estimates a GDP 1% by 2025 and 1.2% by 2024.
“These factors counteract, and that is why we do not change the growth perspective,” highlighted the economist.
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“Even if tariffs arrive, what could occur is the depreciation of the exchange rate; We do not see that the value chains are going to be broken. Where there may be more damage is in investment due to uncertainty. The important thing is that uncertainty dissipates as soon as possible, so that investment is not affected,” he commented.
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How can businesses mitigate risks associated with currency fluctuations in the context of U.S.-Mexico trade relations?
Interview with Carlos Serrano, Chief economist at BBVA Mexico
Time.news Editor: Welcome, Carlos. thank you for joining us today. Let’s dive right in. You’ve mentioned that the statements from former President Trump might impact the exchange rate. Can you elaborate on what that could mean for the Mexican peso?
Carlos Serrano: Absolutely. The first point to highlight is that while rhetoric like threats of tariffs can create immediate market reactions, they are unlikely to disrupt the deep commercial integration that we have in North America. What we anticipate is that any impact will primarily be felt in the exchange rate rather than a significant breakdown in trade relations.
Time.news Editor: so, you’re suggesting that the intricate trade relationships will remain resilient despite potential tariffs.Is that correct?
Carlos Serrano: Exactly. The North American market is deeply interconnected, and this will continue. Although tariffs could lead to the depreciation of the peso, we don’t foresee a fragmentation of value chains. The structure is to embedded for that.
Time.news Editor: That’s an interesting perspective. You also mentioned potential impacts on investment due to uncertainty. How might this uncertainty manifest in practical terms for businesses in Mexico?
Carlos Serrano: Yes, uncertainty is indeed a crucial factor.When businesses are uncertain about future trade conditions or economic stability, they may delay or scale back investments.This hesitance can stall economic growth, which is why it’s vital that any uncertainty is addressed quickly. Our estimates project a GDP growth of 1.2% in 2024 and around 1% in 2025, but these figures may be at risk if this uncertainty lingers longer than anticipated.
Time.news Editor: Given this context, what advice would you offer to businesses operating in or considering entering the mexican market right now?
Carlos Serrano: My primary advice is to remain vigilant and adaptive to changes in the trade environment. Businesses should consider diversifying their supply chains to mitigate risks and increases in costs associated with exchange rate fluctuations. Additionally, maintaining good communication with stakeholders and staying informed about macroeconomic indicators can help in strategizing appropriately.
Time.news Editor: That’s quite insightful, Carlos. In light of your comments on exchange rates, how do you envision the future of the peso in response to ongoing U.S.policies?
Carlos serrano: I believe we will see fluctuations in the peso as market reactions play out. However, I maintain that North America’s trade structure will provide a stabilizing affect long-term. The challenges may come in the form of initial volatility, but ultimately, the integration will support resilience in the currency.
Time.news Editor: Before we wrap up, do you have any final thoughts or predictions on how the commercial landscape in North America will evolve in the coming years?
Carlos Serrano: What we are observing is a continual deepening of integration among North American economies. We foresee adaptation but not reversal. Innovations in sectors like manufacturing and technology will continue to shape the landscape.Maintaining competitive advantages and nurturing these ties will be crucial for sustained growth on all sides.
Time.news Editor: Thank you, Carlos, for sharing your expertise with us today. Your insights provide valuable context for understanding the economic dynamics between the U.S. and Mexico as we move forward.