Friday, December 8, 2023

Private sector raises Mexico’s growth forecast for 2022 to 1.93%

Private sector experts raised to 1.93% the forecast for the growth of the Mexican gross domestic product (GDP) for 2022 from 1.78% in the previous month, according to the August monthly survey of the Bank of Mexico (Banxico).

However, the forecast for 2023 decreased to 1.31% after a previous estimate of 1.51%, according to the 38 national and foreign analysis and consulting groups that participated in the Banxico survey, between August 16 and 30.

In addition, the specialists raised their outlook for general inflation at the end of 2022 to 8.15%, while the previous month they projected that it would close the year at 7.83%.

The Mexican inflation rate closed 2021 at 7.36%, its highest level in two decades and more than double Banxico’s 3% target.

The forecasts are published after it was released last week that the Mexican economy grew, definitively, 0.9% quarterly from April to June, with which it accumulates an annual growth of 1.9% so far in 2022.

As factors that could hinder the growth of economic activity in Mexico, governance stood out at a general level, cited by 45% of the experts, and inflation (18%), while public insecurity stood out at a particular level (18%) .

Regarding the exchange rate, analysts predicted that the peso at the end of 2022 is 20.76 units per dollar, while in the previous survey the projected price was 20.80 pesos per US bill.

By the end of 2023, analysts estimate that the Mexican currency will be exchanged at 21.19 units per dollar, a figure lower than the estimate of 21.27 the previous month.

The levels prior to the pandemic were close to 18.5 pesos per dollar.

Regarding the external sector, for 2022, the expectations on the trade balance were revised downwards, going from a deficit of US$15,279 million to a greater one of US$16,901 million, while by the end of 2023 they expected a deficit of US$17,070 millions.

The forecast of private analysts regarding foreign direct investment (FDI) for 2022 grew from a projection of US$31,091 million to a higher one of US$33,662 million, while for 2023 its estimate was US$31,119 million.


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