Banxico Presents 2Q22 Economic Results

Mexico’s Central Bank (Banxico) took actions to maintain inflation expectations anchored for the long-term. The central bank also conveyed adjustments in financial markets to help recover economic stability. 

Victoria Rodríguez Ceja, Governor, Banxico, explained that the bank has focused on conducting monetary policy in a severely complex and uncertain environment. Rodríguez Ceja attributed these challenges to the COVID-19 pandemic and the war between Ukraine and Russia in Banxico’s latest Quarterly Report (April-June 2022). “In this regard, the Board of Governors of Banco de México determines its monetary stance with the aim of promoting an orderly adjustment of relative prices, financial markets and the economy as a whole, leading to the convergence of inflation to the target of 3 percent,” said Banxico.

Global inflation continued its steep increases, forcing most of the world’s central banks to retire monetary stimulus, explained Rodríguez. While global economic activity weakened and growth forecasts fell for many of the world economies, Mexico’s economic activity in the country continues to slowly recover despite the record growth of inflation.  

The International Monetary Fund’s (IMF) World Economic Outlook (WEO) from April-July 2022 indicated that Mexico’s annual GDP growth expectations increased 0.4 percent for 2022, as the economy is expected to grow 2.4 percent annually this year. However, the WEO also showed a major decrease in expectations for 2023, with a 1.3 percent predicted contraction that would set Mexico’s annual growth at 1.2 percent for that year. 

The global economy also showed signs of a slowdown, with expectations falling by 0.4 percent and 0.7 for 2022 and 2023, respectively, in July 2022 in comparison to April. Currently, the global economy is set for a 3.2 percent growth in 2022 and 2.9 percent growth in 2023. 

Most Latin American currencies depreciated in 2Q22, while the dollar appreciated during the same period. However, the Mexican economy did show signs of growth in 2Q22 with a 0.92 percent increase, which continues with the country’s positive trend in 1H22, according to the National Institute of Statistics and Geography’s (INEGI) System of National Accounts (SNCM).