Economy#Between the lines | The recession is only a...

#Between the lines | The recession is only a matter of time

(Expansion) – “The worst is yet to come and many people will feel 2023 as a recession.” The International Monetary Fund (IMF), last week, announced its and, along with the warning with which this story begins, slipped into an apocalyptic future: “As the world economy heads into troubled waters, it is possible that a financial turmoil.”

Mexico is invited to the ‘fiesta’.

Last Tuesday, the IMF announced that it expects a growth of 2.7% for the world economy in 2023 (0.2 percentage points below the perspective it issued in July), with the possibility of it falling below 2%; while for this year it estimates a growth rate of 3.2%.

The Fund’s forecasts are crude, realistic, but may fall short. Its updates occur every three months and, in an environment of uncertainty and constant changes in the economy, ninety days for a revision is a very long period. This report takes into account current changing conditions and potential changes ahead, but 2023 may see global conditions more uncertain and riskier.

This year, the global economy will grow around 3%, although it is not ruled out that in the coming weeks there will be a more marked slowdown that will push this figure down.

But things will get complicated in 2023.

According to the perspective of Alfredo Coutiño, director for Latin America at Moody’s Analytics, that 2.7% growth in the global economy observed by the IMF seems optimistic. Today, some countries in Europe are not only touching zero growth but have already reported economic contraction in the second quarter, while the third and fourth quarters look even worse, especially for the European locomotive that is Germany.

The ‘fire’, furthermore, has already spread to other economies; there are financial problems in England, supply crisis in France…

China reported negative quarterly growth in the second quarter and is expected to return to positive territory by the third, but gradually. China may continue to recover in the fourth quarter but it has already slowed down.

The red light today is the growing probability of a recession in the United States, which represents about 25% of world production; a quarter of the world economy is represented by our neighbor.

The United States and China account for almost 40% of world production. If the two locomotives get into trouble, there is no way the rest of the world will avoid the shocks, particularly emerging economies whose main markets for their exports are both countries. If one goes into recession and the other slows down, there will be a recession in Latin America and Mexico will not escape because its economy depends on the economic cycle of the United States.

This crude story does not end here. A new factor may further complicate expectations: Taiwan. Given the dispute that China maintains with this island, interruptions have begun to occur in container traffic passing through the Taiwan Strait and this is complicating the delivery of supplies of manufactured and semi-manufactured products to various countries. Under this scenario, if frictions worsen we will have another problem in the supply of materials for production processes throughout the world.

What’s coming to Mexico? By 2023, the consensus projects economic growth of 1 to 1.5%. “If the United States grows less than 1%, I don’t see how Mexico can grow at 1.5. If our neighbor grows half a point, Mexico will grow less than one point due to the elasticity of the Mexican market with respect to the growth of the United States”, affirms Alfredo Coutiño.

The peso-dollar parity will also have its adjustment. The dollar is expected to appreciate and that will cause the depreciation of other currencies. Some have already advanced: the Brazilian real, the Chilean peso and the Colombian. The Mexican peso is said to be one of the most stable currencies today. What happens is that the heat of the “fire” has not yet reached it, but it is expected that the peso will begin to depreciate at any time in 2023, before the second semester.

Thus, the uncertainty about the performance of the economy will worsen. Within the private sector there is no doubt: Mexico will fall into a recession. What is not known is how deep it will be and how long it will last. Some businessmen consulted say that it will be short, others that it will not be anything like the one in 2009 when the markets practically collapsed.

At this time, despite the fact that the recession has been announced, there is no valid strategic planning, so many plans are being generated on the fly and the budgets will be very short-term, quarterly or bimonthly. According to calculations from businessmen consulted, the recession will land in Mexico during the first quarter of 2023. Today the priority is to adjust to what is approaching. No panic yet.

The entrepreneurial ecosystem will not evade this agitation either. The appetite of the funds has changed, investors are much more cautious, but the growth potential in Latin America through startups is still maintained. “Without a doubt we will see many layoffs, companies going bankrupt, but this responds to the formalization of the cycles. The medium and long-term future remains very positive”, says Ricardo Weder, founder and CEO of Jüsto.

The canisters with gasoline are many and can spread the ‘fire’, so you have to be prepared to try to get the best out of all this.

For companies, caution is one of the recommendations. Mergers and/or acquisitions may have to wait, although it may also be a good time to hunt for cheap companies. Be frugal with spending.

For people, the best thing is prudence, acting with caution, even prevention. It is important to maintain sources of income, employment; to think that, if you have an income now, not to spend it on frivolities. You have to try to save when possible in order to survive in times of crisis.


The departure of Luz María de la Mora from the Undersecretary of Economy represented a bucket of cold water for the private sector. She, some businessmen maintain, was the best official of the Mexican government. An ally and a balancing factor was lost amid the electrical skirmish at USMCA and other issues. Troubled times are predicted.

Editor’s note: Jonathán Torres is managing partner of BeGood, Atelier de Reputación and Storydoing; business journalist, media consultant, former editorial director of Forbes Media Latam. Follow him on and on Twitter as . The opinions published in this column belong exclusively to the author.

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