Inflation Continues to Rise, While Economic Growth Remains Low
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Inflation Continues to Rise, While Economic Growth Remains Low

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Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Thu, 09/29/2022 - 10:00

INEGI’s report for the Mexican economy for July 2022 showed worrying results for Mexico, as the country presents signs of a palpable slowdown with a historical increase in inflation. 

Ready? This is the week in finance:

INEGI Presents Economic Results for July 2022

Mexico’s National Institute of Statistics and Geography (INEGI) reported that in July 2022, the Global Activity Indicator Economic (IGAE) increased 0.4 percent at a monthly rate with seasonally adjusted figures, monthly variation increased by 0.8 percent in primary activities, 0.4 percent in secondary and 0.4 percent in tertiary activities.

“Global growth is slowing sharply, and a further slowdown is likely as more countries enter a recession. I am deeply concerned that these trends will persist, with lasting consequences that are devastating for people in emerging markets and developing economies,” said David Malpass, President, World Bank Group, as reported by MBN. 

CONDUSEF Evaluates Afores

Ten Afores held retirement savings valued at MX$5.2 billion (US$261 billion), accounting for 68.5 percent of all savings in Afores. CONDUSEF reports that Afore XXI Banorte held 20.4 percent, Profuturo Afore 17 percent, Citibanamex Afore 15.6 percent and SURA Afore 15.5 percent of Mexicans’ retirement savings. CONDUSEF also registered a total of 4,408 claims from January to July 2022. Claims pertaining to not attended nor concluded processing requests were the most common, representing 51 percent of total complaints.

Inflation Reached 8.76 Percent: INEGI

INEGI reported that a 0.41 percent increase in inflation during the first two weeks of September left Mexico’s inflation at 8.76 percent. 

“The underlying price index grew 0.44 percent at a biweekly rate and 8.27 percent at an annual rate. In the same period, the non-core price index rose 0.32 percent biweekly and 10.22 percent annually. Within the underlying index, at a biweekly rate, the prices of merchandise increased 0.50 percent and those of services 0.36 percent,” reports INEGI via its INPC. 

AWS will Expand its Offices in Mexico

Jaime Vallés, Vice President Latin America, AWS, announced that the company will open new offices in Monterrey and Jalisco. It will also developing a new center in Queretaro. 

“We are going to continue investing in the [Latin American] region, to the extent that our clients continue to ask us for [our services]. So, more than a business plan, we are going to continue moving at the same speed,” Vallés told Efe.

The Importance of Liquidity during Global Uncertainty

Large businesses in Mexico are diversified internationally due to the nature of globalization. However, Sandra Beltrán, Vice President and Senior Analyst, Moody’s Investor Service indicates that the country’s geographic position represents the main success factor for companies’ resilience. 

“Moody’s annual liquidity reports have consistently shown low risk in Mexico, especially since 2008. Even today, as the country deals with a complex economic situation, credit risk has not deteriorated as much as expected, at least among the companies we cover. These companies have become more adaptable to their environment,” said Beltrán.

How Can Companies Increase Competitiveness Through Benefits?

Nima Pourshasb, CEO, Minu explains that a staff benefits strategy is vital to properly compete in the market. 

“The battle to attract talent continues. The Great Resignation and poaching from remote-only companies from other parts of the world makes employee attraction and retention harder. Add to this the market-driven pressure on budgets and getting the employee benefits strategy right is now more important than ever,” said Pourshasb.

Tech Opportunities will Grow in Latin America: Atlantico

In Latin America, opportunities have opened for fintechs, as open banking, pix and open finance initiatives gain traction with commitment to bring changes. According to the third edition of early-stage venture capital fund Atlantico’s “Latin America Digital Transformation Report” tech, opportunities in Latin America have already surpassed those in China and India. 

Photo by:   Image by Olichel from Pixabay

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