“The lower growth expected for 2023 and 2024 compared to what was forecast in the previous Report is mainly explained by a deterioration in growth expectations for the United States economy and, especially, for its industrial activity,” estimated the central bank.
Banxico estimates that the risks for the Mexican economy are to the downside due to a possible lower external demand, volatility in the financial markets and effects on trade due to bottlenecks.
They also estimate that the lower-than-expected recovery in investment spending will also affect economic growth as well as meteorological phenomena such as droughts or cyclones.
Banxico estimates that between 420,000 and 620,000 formal jobs with social security will be created this year. In the previous quarterly report, the expectation was that between 450,000 and 650,000 jobs would be created.
For inflation expectations, it is estimated that it will converge to the target until 2024 since pressures are detected in the increase in wages and housing prices, which have also put pressure on services.
“The evolution it has shown suggests that the disinflation process will be slower than predicted in the previous Report. Likewise, it is indicative that external pressures could be taking longer to fade, while other internal ones could be becoming more noticeable” , the report highlights.
