EconomyFrom Zero! Mexico's economic growth in 2023 will be...

From Zero! Mexico's economic growth in 2023 will be 0%, according to Bank of America

The horizon looks bleak for the Mexican economy towards the second half of 2022 and next year due to external and internal factors.

“The engines of economic growth are cooling due to the issue of inflation and interest rates. We are no longer so concerned about the side of obstructions in production, now it is the demand side that worries us, “said Alejandro Saldaña, chief economist of Ve por Más (BX+), in a press videoconference on Wednesday.

“To this we must add that government spending has remained fairly stable, with a policy of austerity and priority to fiscal stability; nor is it going to be an engine for growth in the coming quarters,” he added.

BX+ sees a complicated year-end for Mexico. In such a way that it cut its expectation of economic growth from 2% to 1.8%. The same thing happened with the estimates for GDP in 2023, which went from 1.8% to 1.7%.

This is due to the expected slowdown in consumption in the United States as a result of the restrictive monetary policy of the Federal Reserve (Fed), which seeks to bring inflation to the target of 2% average.

As well as the confinements that continue to be carried out in China to stop the outbreaks of coronavirus, as well as the war in Ukraine; factors that have an impact on the supply of inputs worldwide.

Between April and June the Mexican economy registered a quarterly rate. This despite the contraction registered by the United States, its main trading partner.

The expectation of economic growth for Mexico from BX+ is below the 2.4% expected by the International Monetary Fund (IMF), after making an upward adjustment to the national GDP on July 22.

The IMF estimates that the Mexican economy will grow 1.2% in 2023.

Bank of America (BofA) expects Mexican GDP growth of 1.9% for this year, however, it is not so optimistic for 2023, where it does not expect growth in the Mexican economy.

BofA reduced to 0.0% its expectation of economic growth for Mexico next year, from 1% previously.

Mexico’s GDP will be affected by external factors, particularly increases in interest rates in the US, while at the domestic level, higher financing and energy costs, as well as a still somewhat restrictive fiscal policy, will add pressure to the economy, which already faces uncertainty due to the difficulties of the T-MEC, detailed Bank of America.

With information from Reuters

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