Mexican economy grew above its long-term trend in August 2022

The Mexican economy grew above its long-term trend during August 2022, according to the System of Cyclical Indicators (SIC) published by the National Institute of Statistics and Geography (Inegi).

“In August 2022, the coincident indicator was positioned above its long-term trend by reporting a value of 101.2 points and a variation of 0.11 points compared to July,” states the state agency’s periodic report.

The long-term trend of economic cycles is represented by a value equal to 100 points, which allows identifying four phases of the economic cycle.

These four phases are: growing above the long-term trend of 100 units -as was last August-, growing below the long-term trend, decreasing above the long-term trend, and decreasing below the long-term trend.

This system of economic cycles is integrated with two types of indicators: one “coincident” with the month in question (August 2022) and another “advanced” (September 2022), which allows for a timely follow-up of the behavior of economic activity and comparisons with different economies worldwide, explains the report’s fact sheet.

LEADING INDICATOR

A value of 100 units also represents the long-term trend of the leading indicator.

“In September 2022, the leading indicator was below its long-term trend by registering a value of 99.4 points and a decrease of 0.27 points compared to August,” the report details.

Inegi details that, with the new information, “the signals reported, both by the coincident and leading indicators, are similar to those disseminated the previous month”.

The reported business cycle trend reflects the preliminary figures of the gross domestic product of the Mexican economy, which advanced 4.3% year-on-year in the third quarter of 2022, compared to the same quarter last year, recently published by Inegi.

However, Inegi explains that the magnitude of the fall or recovery of these indicators “should not be considered as a measure of the contraction or recovery of economic activity, but as an indication of the degree of certainty about the course it is presenting.”

This official cyclical measurement system is generated with a methodology compatible with that used by the Organization for Economic Cooperation and Development (OECD).

With information from Sputnik