January 20, 2020
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In October and November 2019, the nominal annual growth rates of the balance of the current credit portfolio granted by commercial banks to the non-financial private sector were 5.7 and 5.8%, respectively (2.6% real in October and 2.8% real in November).
Last December an increase of 20% was announced for minimum wages for this year. This will obviously mean an increase in the standard of living of those workers who perceive it: about a million people, according to the National Survey of Occupation and Employment (ENOE).
Mexico, Canada and US have reached an agreement to renew the North American Free Trade Agreement (NAFTA) entered into 25 years ago and which president Donald Trump promised to renegotiate during his electoral campaign. It's important to remember that an understanding had already been reached in December of last year.
As predicted, the deceleration of formal employment has been persistent practically throughout the year, in November it grew 1.7% YoY, the lower level since the crisis of 2009. From January to November 724 thousand jobs have been created.
There is still plenty of room to cut rates; we expect the monetary policy stance to reach neutrality by the summer of next year.
In the first nine months of 2019 the main source of bank credit growth granted to the private sector was that granted to companies. Commercial banks deposits loses dynamism. Weakness of external financing sources influenced by concerns about the global cycle and internal uncertainty.
A faster easing pace is warranted but Banxico is likely to remain overly cautious. No signs that Banxico is willing to speed up the long overdue easing cycle.
There are 272 million migrants in the world in 2019, 23.0% more than in 2010. Mexico is the 2nd country with more migrants in the world. In 2019 there are 12.4 million Mexican migrants in the U.S. Remittances to Mexico will exceed 36 billion dollars in 2019, which will be ranked 3rd in the world, displacing Philippines.