Banxico Foresees Positive Economic Trends for Mexico in 2023-2024

Mexico’s Central Bank, Banxico, recently updated its economic growth forecasts for 2023 and 2024, showing optimism.

This positive revision reflects stronger-than-expected external demand and increased domestic spending.

In their latest third-quarter inflation report, Banxico predicts Mexico’s Gross Domestic Product (GDP) to rise by 3.3% in 2023, a growth higher than the initial 3.0% forecast.

The outlook for 2024 is also promising, with an anticipated GDP expansion of 3.0%, surpassing the previous 2.1% estimate.

Despite a probable deceleration in external demand by 2024, Banxico predicts the year’s growth will be solid, bolstered by internal spending.

However, the forecast for 2025 indicates a growth rate below the historical average, reflecting a shift in the balance between external and internal demand.

The bank projects a 1.5% GDP growth for Mexico in 2025.

Potential Risks

Banxico also identified potential risks that could impact the Mexican economy.

These include a decline in external demand, notably if the United States experiences a prolonged, severe recession.

The possibility of disruptions in international trade amid various global geopolitical and commercial tensions was also highlighted as a concern.

Despite these risks, Banxico remains confident in the resilience of Mexico’s economy, primarily fueled by domestic expenditure.

The Mexican economy, ranking second in size in Latin America after Brazil, showed a 3.9% growth in 2022, as per the National Institute of Statistics and Geography (Inegi).

Looking ahead, the Mexican Government projects an economic growth rate of between 2.5% and 3.5% for the nation in the years 2023 and 2024.

These projections suggest a continuing trend of economic recovery and stability for Mexico.