Mexican GDP to Grow by 0.9% in 2023: Citibanamex
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Mexican GDP to Grow by 0.9% in 2023: Citibanamex

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Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Tue, 01/24/2023 - 12:39

Citibanamex Survey of Expectations (ECE) concluded that Mexico’s GDP could grow by 0.9% annually in 2023. The results come from a survey of economic analysists, who also estimated a 0.25% increase in Mexico’s interest rates that could arrive in February. Most analysts surveyed estimated the median target rate at 10.50%, a decrease from the previous 10.63%. The projection for 2024 also fell from 8.38% to 8.25%. 

The ECE indicated that expectations for a stronger peso remain, with a consensus of an exchange rate of MX$20.3 per dollar by the end of 2023. This marks a decrease from the previous estimate of MX$20.5. Projections for 2024 estimate that the exchange rate will hit MX$20.80 per dollar, a decrease from a survey conducted two weeks prior that put the exchange rate at MX$21.00. 

Annual headline inflation estimates remained at 7.9% for the first half of January, according to the consensus. Analysts anticipated that the National Consumer Price Index (INPC) increased by 0.39% fortnightly, which implies a basis of 7.87% annually after estimates from the first half of January. The annual forecast was placed marginally above the 7.86% registered in the two previous weeks. Analysts project a rise of 0.32% biweekly, or 8.32% annually, a decrease of the previous estimate (8.34%) for underlying prices. 

For January 2023, the conducted survey indicated that general inflation stood at 7.8% annually. During said month, the consensus forecasted headline inflation to stand at a monthly 0.55% or 7.77% annually. The rate decreased by 0.5% in comparison to December 2022. For core inflation, analysts project a 0.55% monthly or 8.28% annual inflation rate.

Citibanamex explained that headline inflation expectations for 2023 increased and held stable for the medium term. Headline inflation estimates increased from 5.02% to 5.10% for the end of 2023. However, headline inflation for 2024 remained unchanged for 2024 at 4.00%. Core inflation expectations remained at 5.00% and 3.90% for 2023 and 2024, respectively. Regarding the median expectation for the average annual inflation rate in 2025-2029 forecasts stood at 3.70% once more explained Citibanamex via its Survey of Expectations (ECE).

Citibanamex expects a harsh decline in annual GDP growth, as the median forecast for 2022 GDP growth remained at 3.0%, while the consensus placed GDP growth for 2023 at 0.9%. The forecast range stood between 0.3% and 1.8%. For 2024, the median for economic growth dropped from 2.0% to 1.9% from the previous survey. 

The World Bank had also forecasted a 0.9% growth in 2023, according to its latest Global Economic Prospects report. In 2022, the country grew by 2.6%, surpassing the bank’s forecasts, as previously reported by MBN. The institution downgraded almost all its forecasts for advanced economies, cutting its growth outlook for the global economy to 1.7%

Photo by:   Image by Stevepb from Pixabay

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