more inflation, less growth: experts

What do private analysts surveyed by the Bank of Mexico anticipate for 2023, in terms of growth and inflation in Mexico?

What they anticipate is lower growth and higher inflation.

They believe that next year inflation will be greater than 5% and the growth of the Gross Domestic Product will be barely 1%.

The expectation of economic growth of the analysts contrasts with that of the Ministry of Finance, which projects a growth of 3% at the end of 2023.

What implications would such a lower growth rate have for next year?

According to an analysis by Banco Base, if the expectations of private analysts are fulfilled, the Mexican economy would register a total growth in the six-year period of 1.09% real.

This would be equivalent to an average annual growth of 0.18%, and would be the lowest growth on record in the Inegi GDP series.

And in terms of GDP per capita growth, it would register a contraction of almost 5%! (4.88%) in the six-year term.

It would be the worst performance since the six-year term of Miguel de la Madrid, who inherited an economy in crisis from his predecessor José López Portillo, who first wanted to manage abundance and then said that the country had been looted.

And what are the main risks identified by private analysts?

Among the most important they list Insecurity; price pressures and the weakness in the world economy.

Inflation is at the heart of those concerns. Analysts raised their inflation expectations again for this and next year and cut their growth forecast for 2023.

In fact, the median general inflation expectation for the end of this year increased for the 15th consecutive month.

For this year, the 38 groups of specialists that participated adjusted their inflation projection from 8.44 to 8.50%, while for the next one from 4.76 to 5.09%.

Regarding growth, on the one hand, they increased their forecast for 2022 from 2 to 2.1%.

But for the next year 2023, they reduced it from 1.2 to 1%.

The main risks they see for economic growth are: problems of public insecurity (14% of responses), inflationary pressures (13%) and weakness of the external market and the world economy (11%).

They also mention the uncertainty regarding domestic policy and the monetary policy that is being applied (7% in each case); other rule of law problems (6%) and conjunctural factors (monetary policy in the United States) and uncertainty about the domestic economic situation (5% in each case).

Regarding the perception of the economic environment, expectations deteriorated.

When asked about the business climate for the next six months, 69% think it will get worse, 25% think it will stay the same and only 6% think it will improve.

Regarding whether they consider that it is a good time to invest, 74% think that it is a bad time, 23% are not sure and only 3% see that it is a good time.

The expectations in general are not positive. Hopefully they will not be fulfilled, although so far, it seems that they will be fulfilled. We will see.

glimpses

-The Business Coordinating Council, chaired by Francisco Cervantes, expressed its concern about the Electoral Reform initiative proposed by the federal government.

The dome of domes warns that today we already have fully reliable electoral authorities in their transparency, impartiality, certainty and efficiency for the holding of the elections.

And ask popular representatives to work to preserve the strength and autonomy of our democracy.

-Verónica Baz, former director of the Research Center for Development (Cidac) joins the team of the prestigious consulting firm Integralia, headed by Luis Carlos Ugalde. The team of the leading consulting firm in public affairs is strengthened.

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