Private Sector Lowers Growth Expectations: Banxico

Private sector specialists reduced their growth expectations for the Mexican economy for 2022 and 2023 as inflation is forecasted to increase and the economy remains stagnant after a disappointing 4Q2021, reported the Bank of Mexico (Banxico).

“Headline and core inflation expectations for late 2022 increased, compared to the December survey. For late 2023, headline and core inflation expectations remained at levels similar to those (predicted) the previous month, although the median headline inflation forecast was revised upwards. Real GDP growth expectations for 2022 and 2023 decreased relative to the previous survey,” reads Banxico’s press release.  

Head and core inflation expectations for the next one to four years decreased in comparison to December’s estimates, with median levels remaining at close levels, said Banxico. Estimates for the next five to eight years indicate that headline and core inflation remained similar to those predicted in December’s survey.

Banxico’s latest survey also indicated that private sector specialists decreased their growth estimates for Mexico’s GDP during 2022 from 2.79 percent to 2.27 percent. For 2023, estimates also shrank from 2.21 percent to 2.14 percent. Specialists increased their growth estimates for 2024 from 2.16 percent to 2.22 percent. The peso-US dollar exchange rate for the late 2022 and 2023 was also revised downwards, reported Banxico.

The Mexican economy had an uneven 2021 and closed the year with minimal growth, reported the National Institute of Statistics and Geography (INEGI). While the country’s GDP grew 19.9 percent in 2Q2021 and 4.5 percent in 3Q2021, by 4Q2021 the economy had slowed down with a 0.1 percent GDP growth, as reported by MBN. On the other hand, Mexico saw its employment numbers bounce back from Dec. 2020 to Dec. 2021 as the country produced 994,506 new jobs that provided an important impulse for the economy. Banxico also reported that specialists maintained similar expectations for unemployment rates in comparison to the previous month.