The most recent data on the Mexican economy suggest a moderate recovery following the slowdown and decline of GDP in the second quarter of 2013. The recovery is a result of the upturn in consumption and investment and continued strength of exports over the last few quarters, against the backdrop of a controlled inflation environment. Also contributing to this improvement has been the more expansive bias in monetary policy applied by the Bank of Mexico in recent months.
With respect to the exchange rate, the Mexican peso depreciated again against the euro during the quarter. This has had a negative impact on the quarterly comparison between financial statements in the area. As in previous reports, all the comments that refer to exchange rates will be expressed at constant rates, unless expressly stated otherwise.
Against this backdrop, the country’s financial system continues to maintain adequate levels of solvency, profitability and liquidity. Business activity continues to grow, although at a slightly slower pace in line with the slowdown of the Mexican economy in the first half of the year. This more moderate growth in activity has also been affected by the greater volatility of international financial markets and an increase in risk perception with respect to emerging economies, as highlighted by the Council for the Stability of the Financial System (CESF) at its meeting on September 30. Its statement highlighted that although Mexico has not avoided this volatility, the strength of its financial system and what are in general clear, transparent and predictable policies have contributed to any impact being weaker and the adjustments more orderly than in other emerging economies.