Banxico, INEGI Present 2Q22 Reports

Banxico’s second quarter reports highlighted rising inflation and other economic challenges, while INEGI’s quarterly results showed that non-financial corporations generated 48.4 percent of Mexico’s Gross Domestic Product (GDP).

Ready? This is the week in finance:

Banxico Presents Mexico’s Outlook for 2Q22

(Banxico’s ) 2Q22 report , highlights that inflation remained significantly above the 3 percent goal, while core inflation continued to show important increases. The report also shows the bank’s outlook for inflation, economic activity, and other vital economic indicators. 

"The environment of high inflation at the global level, derived from the COVID-19 pandemic, further deteriorated due to the geopolitical conflict in Ukraine that led to an increase in energy and food prices, as well as disruptions in supply chains. This conflict has also dealt a blow to growth expectations at the global level, creating greater risk aversion,” reported Banxico.

The Automotive Industry and Financial Inclusion

Financing is playing an increasingly larger role in the automotive industry, which brings new risks for lessors. “The only way for banks to grant loans on pre-owned cars is to mitigate these risks through the floors of pre-owned branded dealers and some multibrand dealers, where they perform document verifications, and conduct mechanical and legal inspections to ensure the overall condition of the vehicle,” said Carlos Del Rio, CEO, Credimotion. 

However, penetration remains below expectations, as most transactions take place outside the multibrand and pre-owned branded dealerships. 

INEGI Presents Quarterly Results

INEGI reported that investment represented 23.4 percent of Mexico’s GDP.,the financing of domestic savings contributed to 24.6 percent of the GDP minus foreign savings, which represented a 1.1 percent deficit. Desegregating  investment by sector shows that non-financial institutions made investment expenses equivalent to 15.5 percent of the GDP, households made investments representing’ 6 percent, the general government 1.8 percent, and financial companies practically did not make investment expenses. 

Digital Payments Allow Flexibility for Businesses

“Clients want to buy what they need in the easiest way possible. If payment methods are not diversified, it becomes more difficult for the customer to obtain the product,” said Leonardo Escobar, Senior Vice President and Head of Latam, ACI Worldwide. 

The client will always want flexibility, ease of payment, convenience and security because of lack of comfort when giving out credit card information, said Escobar. For that reason,;small and large businesses must continuously simplify buying their products or services.