Growth better than expected

The Mexican economy grew more than expected. It is certainly good news. It is better that the economy grows more than most analysts anticipated.

As of the third quarter of the current year, the Gross Domestic Product grew 1%. Compared to the same period last year, it grew by 4.3%.

The economic dynamism was general. Growth during the first nine months of the year would have been 2.7% compared to the same period in 2021, so the economy would be profiled to close the year with growth of more than 2%.

Everything indicates that the data agrees with the Secretary of the Treasury, headed by Rogelio Ramírez de la O. For this year, he projected a growth of 2.4%.

The Undersecretary of Finance, Gabriel Yorio, despite the forecasts that anticipated lower growth, remained firm. The economic growth floor – he reiterated all the time – is 2.2% for the end of the year.

Now, economists from different financial firms are modifying their projections upwards.

The revised data is yet to be seen, but most likely there will not be much variation.

The economic growth data is positive. However, it is not to throw the bells on the fly.

It must be remembered that the original forecast of the Mexican government itself was 4.1%.

In other words, even if the official growth expectation revised downwards from 4.1% to 2.4 or 2.2% is met at the end of the year, it will be far from the optimistic official forecast embodied in the Federal Income Law for 2022.

Throughout this six-year term, the Treasury has overestimated economic growth, except in 2020.

And for 2023, the expectations, all private analysts agree, are very optimistic.

But beyond expectations, what do the figures recorded so far tell us.

For now, it is a positive fact that marks a positive difference with respect to the unofficial projections.

But, the achieved rate seems high because it is compared against a very low base. In any case, it shows a slow recovery, but not an expansion trend.

According to the analysis of Banco Base, the growth of the third quarter was not enough for the Mexican economy to finish recovering what it lost in the pandemic crisis, since it is 0.48% below the GDP of 2019.

Mexico continues to show a lag in its recovery compared to other nations.

Among the data that explain the economic growth observed in Mexico in the third quarter of the current year, the marked increase in exports stands out, on the positive side; and the poor performance of fixed investment, especially private investment, on the negative side.

According to independent government analysts, Mexico is the only economy that stopped growing in 2019; it was the economy that fell the most in 2020, that of the Covid-19 health crisis; and the one that has least recovered.

Consequently, although the data of higher than expected growth is positive, it should not be considered from a triumphalist point of view.

There is a long way to go for the Mexican economy to recover from the sharp drop it registered since before the pandemic.

And there are still many clouds on the horizon that could negatively impact the economic growth trend for 2023 and for the end of the six-year term, which from now on, everyone agrees, will be a lost six-year term in economic growth.

Hopefully the pessimistic forecasts will be wrong again, although it does not seem likely. At the time