Mexico will not be able to grow at 3% even in 2027: IMF

The mexican economy It will not be able to grow at the 3% that the Mexican government foresees, not even in the year 2027, according to the updated projections of the International Monetary Fund (FMI).

Mexico’s Gross Domestic Product (GDP) has not been able to recover from the impact that activity suffered in the pandemic and, even though it is in a better fiscal position than other similarly developed economies, it will not have the capacity to generate more dynamic growth over the course of the pandemic. of the next five years.

inside the World Economic Outlook (WEO, for its acronym in English), IMF economists project that the Mexican economy will achieve a growth of 2.1% this year.

The expected rate is lower than the 2.4% projected in July, and this cut results from the impact that the greater slowdown in the United States will have on the economy, as well as the effect of a lower purchasing power of households and companies. due to rising prices.

The new IMF forecast, updated within the framework of the organization’s Annual Meetings, is slightly below the 2.2% predicted by the Bank of Mexico, it is also lower than the point estimate of 2.4% that the federal government has and is slightly above the 2% that the market estimates on average according to the most recent survey applied by Citibanamex.

Monetary Fund experts believe that the Mexican economy will withstand the deep economic slowdown in its main trading partner, which this year will reach a 1.6% increase in GDP, a forecast that incorporates a cut from the 2.3% they calculated in July.

Slow march

As read in the WEO, Monetary Fund economists kept their estimate for next year’s Mexican GDP unchanged at 1.2% from their July update.

With this forecast they are positioned as the most pessimistic international organization about the Mexican performance, since they project a more moderate activity than that calculated by the OECD and the World Bank, which coincide in foreseeing an advance of 1.5% in GDP in 1.5% their expectation for Mexico. . Clearly, the possibility of Mexico reaching an expansion of 3% like the one forecast by the Mexican government in the calculation of its Budget is ruled out.

This modest performance of economic activity, which according to experts is linked to the cycle in the United States, will lead to a slight increase in the Mexican unemployment rate which, according to IMF accounts, will stand at 3.7% in 2023, slightly above 3.4%. What are you waiting for this year?

According to the long-term projections of the IMF, in 2027 the Mexican economy will barely achieve an annual advance of 2.1%, similar to what it will have this year.

Inflation out of range in 2023

For IMF economists the mexico inflation it will remain above the upper limit of the range established by Banco de México even next year.

The price escalation will register this 2022 a variation of 8%, which will be registered as the highest since 2014 and will double the average that Mexico had between 2004 and 2013.

For next year, the Fund’s economists believe that inflation will moderate to 4.8 percent. If correct, Mexico will complete three consecutive years with inflation outside the specific objective and far from the upper limit of the range.

At this moment, the press conference begins in the main building of the IMF, in Washington, led by the economic adviser and Director of the Department of Economic Studies Pierre Olivier Gourinchasin what is the second day of work of the Annual Meetings of the Monetary Fund and the World Bank.

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