Economic Activity Grew by 2.7% in December 2022

In its most recent Timely Indicator of Economic Activity (IOAE), the National Institute of Statistics and Geography (INEGI) forecasted a 2.7% annual growth rate for December 2022. Secondary and tertiary activities increased by 1.2% during the month based on seasonally adjusted figures. 

Growth, however, decreased 0.4% in comparison to November 2022. INEGI attributed the drop to the main large sectors of the Global Indicator of Economic Activity (IGAE) and a monthly reduction on secondary and tertiary activities of 0.6%, explained INEGI via a press release.  

INEGI measures the IOAE with a base of 100 which is equivalent to the first period measured in 2013. In December 2022, the value stood at 112.6 for economic activity and for secondary and tertiary activities at 100.7 and 117.9, respectively. The value is based on the real percentage variation with respect to the same month of the previous year and accounts the industrial production index for its estimate. 

Back in July 2022, INEGI had reported that the Mexican economy was showing signs of a slowdown with historical increases in inflation. At the time, the IGAE fell 0.1% and the institute forecasted an annual increase of 2.7% for secondary activities and 0.8 percent for the tertiary sector, as reported by MBN.

Mexico’s economy could grow by 0.9% in 2023, 1 percentage point below its last forecast of mid-2022, according to the World Bank’s latest Global Economic Prospects report. In 2022, the country grew by 2.6%, as previously reported by MBN. Due to growing inflation and other economic concerns, the World Bank cut its growth outlook for the global economy to 1.7% percent from the original projection of 3%. "Given fragile economic conditions, any new adverse development, such as higher-than-expected inflation, abrupt rises in interest rates to contain it, a resurgence of the COVID-19 pandemic or escalating geopolitical tensions, could push the global economy into recession," says the World Bank.

INEGI’s IOAE is based on a nowcasting model, which is focused on an econometric model that aims to take a step further in offering more timely estimates and seeks to provide a set of macroeconomic indicators of interest.