Only One Wall Street Economist Expects Mexico To Cut Rates Friday

Barclays chief economist in Mexico thinks a 25 basis point rate cut is coming at Banco de Mexico's meeting on Friday.

He's the lone wolf on this one. While most other economists think the central bank will keep interest rates at 3%, where they've been since a 50 basis point rate cut in June, Marco Oviedo, who previously worked as chief economic adviser for the staff of President Felipe Calderon, is forecasting that rates will decrease to 2.75% on Friday.

Barclays' latest weekly economic report included several reasons for the rate cut forecast:

Formal employment is up a bit and both IMEF surveys (Mexico's business surveys on manufacturing and non-manufacturing activities) are at their highest levels since April 2013. However, car production is down, as is retail consumption (5.2% in September from August). This suggests "that the external push could be getting softer while the domestic market might still be fragile." Further, a contraction in the services sector caused the Mexican GDP proxy, the IGAE index, to decline by 0.2% month-over-month in August.

In an interview with Business Insider, Oviedo explained that the services sector and consumption data led him to conclude that the Mexican economy isn't growing as quickly as many forecasts expected in the second half of the year.

"Even with the US growing at a very good pace, the economy [here] is not getting any better," he said. "Given that the Fed will maintain rates for a long period of time, Mexico has room to make another cut."