The engines of the Mexican economy weaken

“To this we must add that government spending has remained fairly stable, with a policy of austerity and priority to fiscal stability; it’s also not going to be an engine for growth in the coming quarters,” he added.

BX+ sees a complicated year-end for Mexico. In such a way that it cut its expectation of economic growth from 2% to 1.8%. The same thing happened with the estimates for GDP in 2023, which went from 1.8% to 1.7%.

This is due to the expected slowdown in consumption in the United States as a result of the restrictive monetary policy of the Federal Reserve (Fed), which seeks to bring inflation to the target of 2% average.

As well as the confinements that continue to be carried out in China to stop the outbreaks of coronavirus, as well as the war in Ukraine; factors that have an impact on the supply of inputs worldwide.

Between April and June, the Mexican economy registered a 1% growth at quarterly rate. This despite the contraction registered by the United States, its main trading partner.

The expectation of economic growth for Mexico from BX+ is below the 2.4% expected by the International Monetary Fund (IMF), after making an upward adjustment to the national GDP on July 22.

The IMF estimates that the Mexican economy will grow 1.2% in 2023.

Bank of America (BofA) expects Mexican GDP growth of 1.9% for this year, however, it is not so optimistic for 2023, where it does not expect growth in the Mexican economy.

BofA reduced to 0.0% its expectation of economic growth for Mexico next year, from 1% previously.

Mexico’s GDP will be affected by external factors, particularly increases in interest rates in the US, while at the domestic level, higher financing and energy costs, as well as a still somewhat restrictive fiscal policy, will add pressure to the economy, which already faces uncertainty due to the difficulties of the T-MEC, detailed Bank of America.

With information from Reuters