The Mexican economy will lose strength in 2023, Banxico predicts

“The revision for 2023 reflects the most adverse scenario that the Mexican economy is expected to face for its growth (…) It is worth mentioning that the expectation is maintained that internal demand will maintain a gradual recovery, although the resolution process of The controversies raised by the US and Canada against Mexico within the framework of the T-MEC introduce a new factor of uncertainty and risk that could affect investment decisions in the country,” says the quarterly inflation report.

For this year, expectations remain at 2.2%.

For the generation of jobs before the IMSS, Banxico estimates more jobs with a range of 640,000 to 800,000 jobs. For the next year, the creation of between 420,000 and 620,000 jobs is expected. A lower amount than this year.

Among the main risks facing the Mexican economy for the following months are:

1. That there is a lower demand from the US.

2. That the effects of the pandemic or geopolitical conflicts are prolonged or intensify the effects on trade.

3. Financial conditions that are more stringent than expected and episodes of volatility in international financial markets that affect financing flows for emerging economies.

4. That the recovery of investment spending is lower than expected or insufficient to support the process of reactivating the economy and long-term growth. In this sense, that the controversies associated with the T-MEC contribute to increasing uncertainty, to the detriment of investment.

5. That the COVID-19 pandemic continue to affect the supply and demand conditions of the global economy, adversely affecting the recovery of national economic activity.

6. That extreme meteorological phenomena, such as droughts, atypically high temperatures or cyclones, adversely impact national or regional economic activity.