Banxico: The Mexican economy will grow by 3%
According to Banxico, the Mexican economy will grow by 3% after adjusting its outlook for the end of the year.
According to Banxico, the Mexican economy will grow in 2023, after increasing its estimate for this year. A previous report from Banxico estimated that the economy would grow by 2.3% for the April-June period.
The estimation is marginally above the consensus expectation of analysts from the Citibanamex Survey, which is 2.9%, and in line with the forecast by the Ministry of Finance and Public Credit (SHCP).
For 2024, Banxico estimates that growth will continue, as it raised its expectation for the expected GDP in the first quarter of the year from 1.6% to 2.1%.
For the next year, Banxico contemplates a range of 1.3% to 2.9% for the economy, while for 2023 it is 2.5% to 3.5%.
“The growth of GDP, although it is due to various factors, the economic activity has been associated with a positive evolution of domestic spending, both consumption and investment. Although external demand has shown some weakness, it remains somewhat resilient,” said Victoria Rodríguez Ceja, Governor of Banxico.
They also explained that they expect domestic spending to continue supporting the growth dynamics of economic activity in an external context.
Jonathan Heath, Deputy Governor of the Central Bank, added that the forecasts for the Mexican economy before the year began were very low, with even zero growth.
He emphasizes that the economy of the neighboring country is relatively doing well, and without that effect, the performance looks favorable for Mexico.
Similarly, Omar Mejía Castelazo, Deputy Governor, pointed out that economic activity has exceeded expectations.
The Mexican economy will grow
This could be a response to factors such as the recovery of sectors that had low demand due to Covid-19 and the reversal of consumption patterns, inferring that the Mexican economy will grow.
The quarterly report also indicated that the process of business relocation to the country, while incipient, seems to be underway.
Among the risks for Banxico’s scenarios to materialize are: lower external demand to the detriment of economic activity in Mexico, as well as more stringent financial conditions than expected and/or episodes of volatility in international financial markets.
Among the downside risks highlighted were a long and deep recession in the United States, more restrictive financial conditions and market volatility, as well as new impacts on international trade.
Additionally, the recovery in investment spending may be lower than expected or insufficient to support growth.
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