from the united states. auto exports to this country, in particular, have posted a significant rise since february. following six quarters of decline and stagnation, mainly reflecting lower public spending and the bankruptcy of the three major housing developers, construction picked up in the second quarter. domestic spending also has begun showing signs of recovery. both private consumption and total investment have rebounded, although the latter remains below the for an identification of obstacles to productivity growth in mexico and the potential of reforms, see hanson, g. h. ( 2011 ), understanding mexico ’ s economic underperformance. washington, dc : migration institute policy ; arias, j., et al. ( 2010 ), “ policies to promote growth and economic efficiency in mexico. ” institute for the study of labor discussion paper 4740. bis central bankers ’ speeches levels prevailing two years ago. unfortunately, consumer and producer confidence indexes remain relatively low. notwithstanding some recent pressure partly from geopolitical risks, international financial volatility has declined so far this year, largely reflecting the market ’ s perception that the normalization of monetary policy in the united states is not imminent and will be gradual. declining international risk aversion has fueled some appreciation of mexican financial assets. the yield curve has shifted downward in tandem with that of the united states. as in many other emerging - market economies, the proportion of nonresidents ’ holdings of mexican government peso securities has remained relatively stable since 2013. this may attenuate concerns about possibly ever - increasing financial risk in the economy. however, as experience confirms, portfolio capital flows can easily stop and even revert following a change in market sentiment. due to longstanding, extraordinarily accommodative monetary policies in advanced nations, international markets have tended to react negatively to good news from those economies and vice versa. this apparently awkward behavior seems to reflect the search for yield facilitated by those policies. mexico ’ s strong fundamentals have drawn players with long - term investment profiles. yet, mexico is not immune to spillover effects from factors unrelated to fundamentals, such as anticipation of the path of u. s. interest rates, which could induce a redirection of capital flows away from emerging markets. hence, domestic financial risks should be monitored. on the back of expected higher u. s. growth, a gradual recovery of the mexican economy this year and next is predicted. the bank of mexico ’ s gdp interval forecast is for 2 - to 2.

can be independent of the fed. in any case, the bank of mexico will continue to act in a timely and decisive way to consolidate price stability. conclusions let me conclude by saying that mexico ’ s economic fundamentals are being tested. structural reforms, an improved rule of law, and better security could produce more rapid growth in the medium to long term. with the financial state of pemex weak and posing contamination risks to the mexican sovereign, meanwhile, adjustment of the fiscal stance is a welcome development. fortifying economic fundamentals is an ongoing challenge for policy makers. as recent good inflation performance is not guaranteed, complacency cannot be allowed to seep into monetary policy. pursuit of permanent convergence to the target must continue. see banco de mexico ( 2016 ). “ encuesta sobre las expectativas de los especialistas en economia del sector privado : mayo de 2016, ” june. bis central bankers ’ speeches