Brexit to have adverse effect on Mexico's economy: Barclays' economist

Britain's decision to break away from the European Union (Brexit) will have an adverse effect on Mexico's short-term economic outlook, Barclays Mexico said Tuesday.

"Quite complicated months for the economy are coming up," Barclays' chief economist Marco Oviedo told reporters at a press conference, according to the daily El Universal.

Volatility in the financial markets, as a result of Brexit, is expected to further devalue the Mexican peso, which was already seeing a gradual slide against the U.S. dollar.

"At the end of the year, we expect an exchange rate of 19.70 pesos to the dollar, and above 20 (pesos to the dollar) by March of next year," news website Aristegui Noticias cited the economist as saying.

On Friday, a day after the British voted in a referendum to leave the EU, the peso saw its biggest single drop against the dollar in at least five years, slipping by 3.35 percent.

Oviedo also downgraded his annual growth projections for Mexico, from 2.5 percent in 2016 to 1.9 percent, with a slight uptick in 2017 to 2.1 percent.

"Tough times are coming. There's going to be an election in the United States, where we also have, unfortunately, a candidate with the same protectionist rhetoric," Oviedo said, referring to presumptive Republican nominee Donald Trump.

The possibility that Trump, who wants to build a wall along the U.S. border with Mexico, will win the nomination "is going to keep battering the peso," he said.

On Monday, media reported that the effects of Brexit will lead the Bank of Mexico to raise its benchmark interest this week by some 0.25 points to 4 percent. Enditem