It is an enormous challenge to reduce the deficit by three points of GDP in one year: Espinosa

“The risk that exists is that fiscal consolidation will not be achieved to the extent required. It is an enormous challenge to reduce the deficit by three points of GDP in a single year. Therefore, it is possible that the deficit will be a little higher,” Espinosa said.

It would be the growth of industrial activity in the United States that could help offset this effect. “We have seen that greater resilience has been constantly observed in activity and also in industrial production, which is what is much more related to external demand in Mexico,” he highlighted.

Another factor that would have a positive impact on Mexico’s growth could be nearshoring, although the growth forecast is not free of uncertainty.

Regarding the management of monetary policy, Victoria Rodríguez, governor of the Bank of Mexico, said that in the following monetary policy meetings the possibility of making cuts to the reference rate will be discussed.

In March, Banxico made the first cut to the rate after having it at the maximum of 11.25% for a year.

“In the next meetings we will discuss the possibility of making cuts to the reference rate that we will decide according to the inflationary outlook,” he highlighted.

Inflation has picked up since last November and analysts expect there to be a peak in inflation until next June because inflation in services has been persistent.