Mexican economy outlines the end of 2022 in expansion: IMEF

The Economy of mexico outlines a closing year in expansion, projected the Mexican Institute of Finance Executives (IMEF) when interpreting its two indicators on the state and direction of manufacturing production, consumption and services in the country.

On one hand, the IMEF Manufacturer Indicator November rose 0.5 points compared to October 2022, reaching the expansion zone (50.5).

This indicator has registered some volatility in recent months, always fluctuating around the threshold of 50, and in line with the global trend of a lower growth rate in the trade and manufacturing sector.

The IMEF Indicator it varies in an interval from 0 to 100 points and the level of 50 points represents the threshold between an expansion (greater than 50) and a contraction (less than 50) of the economic activity.

On the other hand, the IMEF Non-Manufacturing Indicator it accelerated in November compared to the previous month, going from 51.7 to 53.4 points. With this data, the Non-Manufacturing Indicator accumulates 10 consecutive months in the expansion zone.

In his session to comment on the results of the IMEF Indicator corresponding to the month of November, the Technical Advisory Committee of the IMEF Indicator He stressed that inflationary pressures, generated by the pandemic and the conflict between Russia and Ukraine, seem to be easing.

According to the Global Supply Chain Pressure Index, calculated by the new york fedtransportation costs, both by land and by air and sea, have been significantly reduced.

The food price index of the FAO shows an annual growth of prices of 6.1% in August, a lower level compared to the maximum of more than 30% annual reached in March of this year.

Los gas prices natural gas, have also been reduced substantially to levels of 5.3 dollars per million btu in the average of the last 30 days, after having touched almost 9 dollars in September.

Looking ahead, although this could mean relief for global inflation, the levels are still far from what was observed prior to the pandemic.

At the same time, the growth prospects globally they continue to deteriorate. The PMI indicators of USA and of Eurozone Both the composite index -which includes manufacturing, services, construction, etc.-, as well as that of the manufacturing sector in particular, are in contractionary territory. In this context, the downward revisions of the growth forecasts for 2023 continue.

In this context, the central banks of the world they will have to reassess their monetary policy strategies. In particular, the case of the Fed in the United States was discussed, whose minutes revealed that it is prepared to continue raising rates, albeit at a moderate pace. However, there is a division within the FOMC on the cumulative effect required to lower inflation and on the lag that monetary policy has on the economy, as well as the sensitivity of different sectors to interest rates.

In Mexico, the Timely Indicator of Economic Activity and industrial production data in September suggested, in line with the indicator IMEFa growth in the third quarter greater than that registered in the previous quarter.

In the sector industrialAlthough mining, construction, and electricity, water, and gas generation activities are showing a slowing trend, manufacturing maintains its expansion pace, with an annual growth rate of 7.2% in the third quarter.

However, in the accumulated of the year, the sector has expanded only 5.6% compared to 10.9% in the same period of the previous year.

roberto.morales@eleconomista.mx

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