The fall in GDP in the US will drag Mexico down in the second half of 2023

In this way, the US economy is expected to start 2023 with growth of 1.5% in the first quarter and a contraction of 2% in the third and a fall of 1% in the last quarter.

The United States, being Mexico’s main trading partner, will spread the recession in the same period, although to a lesser extent.

An economic slowdown in the country will affect consumption and investment, according to Citibanamex. Consumption will be weakened mainly by remittances that will slow down due to the crisis in the United States.

In internal factors, consumption will also be affected by the lower creation of formal employment generated in the country. With the increases in the interest rate by the Bank of Mexico and the 20% increases in the minimum wage, companies could reduce the number of new jobs.

On the investment side, the risks are downwards given the uncertainty that the government has created with the cancellation of infrastructure projects. Fixed investment is still 2% below its pre-pandemic level.

“Efforts must be made to restore trust and provide legal certainty to observe greater investment. In the same way, we continue to think that Mexico should take advantage of all the potential that it could receive in the face of the relocation (nearshoring) of production chains,” highlights the report.