“One of the worst news we have received in Mexico is a possible deep recession in the United States. Let us remember that exports from our industries have not gone so badly, but to the extent that there is a recession and stagnation in the economy of the US, will cause a lower demand for goods in Mexico,” he explained. Alexander Hernandezpresident of Mexican Institute of Finance Executives (IMEF).
It would be towards the end of the third quarter of this year, or towards the fourth quarter, that there may be signs of great weakness in the different branches of economic activity, “so we will have to be very vigilant, in addition to observing if the inflation It has already started to turn around, or if you see an upward trend, ”he explained for his part mario strappresident of National Committee for Economic Studies of the IMEF.
He said that if a recession were to occur, it would be confirmed in 2023, towards the second quarter, “we are going to start seeing signs of greater weakness that could coincide with the start of the recession,” Correa said.
An economy is considered to have entered technical recession when it reports two consecutive quarters down, other indicators such as employment and productive capacity in the country must also be considered, according to the Undersecretary of Finance, Gabriel Yorio .
What happens in an economic recession? Implications
As a result of a recession, effects that are already seen in the economy, can gain more force as lack of productivity in companies, a low consumption, lack of money in homes, Fernández explained.
According to Mario Correa, when there is a recession in the economy, the Business they start to lose sales so they can reach postpone or cut expenses What advertising either payroll.
While in the homes it’s more hard to find a joband therefore obtaining income, so you have to take more care of spending, resort to savings or loans, which deteriorates the financial situation; “You have to take more care of income to make it yield,” said the economist.
