The expected economic slowdown in the United States will slow Mexico’s export growth while consumption remains resilient, the Organization for Economic Co-operation and Development (OECD) reported Wednesday.
In the “OECD Economic Outlook” report, the multilateral body estimated that Mexico’s economic growth will be 2.6 percent in 2023, declining to 2.1 percent in 2024.
“Exports will suffer from slower growth in major trading partners but will continue to benefit from strong integration in manufacturing value chains,” the document stated.
“Manufacturing activity has started to soften as external demand from the U.S. weakens,” it added.
The OECD said the investment will benefit from a smoother functioning of global value chains and the relocation of manufacturing activity to Mexico, a phenomenon known as “nearshoring.”
So far, the flow of remittances is high and consumer credit is slowly recovering, although it remains below pre-COVID-19 pandemic levels, it added.
The OECD report noted that fiscal policy remains prudent and continues to prioritize some social programs and priority infrastructure projects in the country’s south.
“Private consumption will be a key lever for growth, supported by low unemployment,” the document said.
The Mexican economy, the second largest in Latin America after Brazil, grew by 3.0 percent in 2022, according to revised official figures.
Private analysts consulted by the Central Bank of Mexico (Banxico) estimate that Mexico’s economy will grow 1.60 percent in 2023 as a result of an expected slowdown in the United States.
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