Moody’s raises forecast for Mexican economic growth to 3.3%

The performance of the Mexican economy in the first half of 2023 exceeded the expectations of Moody’s Investors Service, for which the agency improved its forecast for gross domestic product (GDP) growth. to 3.3% from the previous 2.4%.

The Mexican economy is also exceeded our expectations in the first half of the year.” This is stated in the report of the international rating agency.

The agency noted that the forecast improvement was due to a combination of higher public sector capital spending and investments related to the relocation of companies to Mexico or “approach”.

and also for higher-than-expected growth in the US, Mexico’s largest trading partner and destination for 80% of the country’s exports.

Moody’s noted that the dynamism of the global economy will remain below the trend and it will continue to slow down until the end of 2023 and 2024.

However, ranked Mexico among the top five emerging economies this deviated from their expectations for an economic bloc called the G-20, between India, Brazil, Turkey and Russia, the same group of countries for which he also improved his growth estimate to 4.3% from 3.9%.

By 2024, Moody’s has retained a similar GDP growth forecast for Mexico at 1.9%. and ruled out that the 3% inflation target would be reached before next year.

Among the factors that could affect Mexico, he named the risk of a recession in the US, although it has decreased.

However, Moody’s considered that below trend production needed to permanently lower inflation to the Federal Reserve’s (Fed) target of 2%.

On the other hand, the report identified the El Niño phenomenon as a risk to agricultural productionas it could skew food prices.

“In Latin America, El Niño is likely to create hot and dry conditions in parts of B.Brazil, Mexico, Colombia, Central America and the Caribbean. at the end of 2023-beginning of 2024, a reduction in agricultural production,” he said.

Meanwhile, he concluded that strong demand and labor markets could also help raise prices worldwide.

(EFE)

Source: Aristegui Noticias

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