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He Bank of Mexico (Banxico) on Wednesday cut its GDP growth forecast to 1.5%. Gross domestic product (GDP) for 2024, down almost one percentage point from the previous forecast of 2.4% amid a period of “marked weakness.”
In his ‘Quarterly report April-June 2024‘, the central bank estimated a central growth scenario of 1.5% with a lower bound of 1.1% and an upper bound of 1.9%.
Likewise, the autonomous body has reduced its central GDP forecast by 2025, which is three tenths less than the previous 1.5%.
The change of heart comes after confirmation last week that Mexican Economy In the second quarter of 2024, it grew by 0.2% quarter-on-quarter and by 2.1% year-on-year, increasing by 1.8% year-on-year.
While Economic Commission for Latin America and the Caribbean (ECLAC) two weeks ago cut its forecast for Mexican economic growth this year to 1.9% from the previous 2.5%.
“The previous report had forecast a recovery in the pace of economic expansion in the second quarter. However, growth in that period continued to surprise and was significantly lower than expected.”
Banxico Government Council This also worsened his prognosis. general inflationwhich will now average 4.4% per year in the last quarter of 2024, compared with the previous forecast of 4%.
“We cannot rule out the possibility that the effects of the shocks on inflation will be more prolonged, that they will become more acute, or that new shocks will emerge that will put upward pressure on it,” he warned.
Despite this context, Banxico defended his monetary policywhich on August 8 led to a 25 basis point cut in the interest rate, which remained at 10.75%.
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The central bank also forecasts the creation of between 410,000 and 550,000 formal jobs related to the sector this year. Mexican Institute of Social Security (IMSS), below the previous range, which fluctuated between 510,000 and 670,000.
The autonomous body concluded in a report that “national economic activity is experiencing a period of marked weakness” but “economic growth in 2024 and 2025 is expected to be moderate, supported mainly by domestic spending.”
EFE
Source: Aristegui Noticias
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
