Mexico’s GDP to Grow 1.8% in 2023: OECD
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Mexico’s GDP to Grow 1.8% in 2023: OECD

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Emilio Aristegui By Emilio Aristegui | Junior Journalist and Industry Analyst - Tue, 03/21/2023 - 16:47

The Organization for Economic Co-Operation and Development (OCDE) highlighted that the global economic recovery will face complex challenges, but raised its growth forecast for Mexico for 2023. The organization made this announcement in its economic outlook interim report, which is an update of the November 2022 assessment for the global economy. 

The OCDE explained that the economic recovery remains fragile, as looming uncertainty prevails in all forecasts about the war in Ukraine, the energy complications that it may hold and significant financial vulnerabilities. 

The organization also highlighted that policy measures are necessary to reduce inflation, improve fiscal policy and revitalize sustainable growth. It highlighted that the world would see “a fragile recovery” in 2023, with forecasts indicating that growth slowed down during 4Q22 in most of the G20 economies, according to the report. 

During 2022, global growth slowed down to 3.2%, standing below initial expectations. The OCDE attributes the dip to the impact of the war in Ukraine, the cost-of-living crisis and the slowdown of the Chinese economy. However, the organization highlighted that business and consumer sentiment improved, food and energy prices have reduced and that the reopening of China has benefited the global economy. Global growth forecasts stood below trend rates in 2023 and 2024, at 2.6% and 2.9%, respectively. 

For Mexico, real year-on-year GDP growth stands at 1.8% according to Interim EO projections for 2023, an increase from the previous report in November 2022 of 0.2%. However, forecasts for the Mexican economy remained unchanged for 2024, with the same 2.1% growth prediction. 

“Inflation is projected to remain above target in Brazil and Mexico in 2023, but decline within the upper half of the inflation target band by the end of 2024, helped by the early action taken to tighten monetary policy,” explains OCDE. 

The OCDE presents its report twice a year on the most relevant global economic trends and prospects for a period of two years. The report consists of a set of projections for output, employment, government spending, prices and current balances on member countries. All member countries provide coverage for the analysis, as OCDE develops a general assessment and a chapter that outlines individual developments and projections with an extensive statistical annex.

Photo by:   Image by Cegoh from Pixabay

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