Analysts reduced Mexico's economic growth to 1.8%: Citibanamex

Economic analysts cut their estimates of Mexico's gross domestic product (GDP) growth to 1.8%, after forecasting 1.9%, according to the Citibanamex Expectations Survey.

However, for other financial institutions, the forecasts are different. In the case of Morgan Stanley, it placed Mexico's economic growth at 2.5%; Banorte at 2.2%; Santander at 2%; Citibanamex at 1.3%; BBVA at 1.2%; Scotiabank at 1.7% and JP Morgan at 1.9%.

As every 15 days, the bank consulted experts and financial institutions, which also adjusted their inflation forecasts for 2022, from 5.98% to 6.38%, while by 2023 it is estimated to be 4.01% (after having predicted 3.88%).

This is due, in part, to the conflict between Russia and Ukraine that has impacted global value chains, as well as commodity prices, mainly energy.

These reductions in the country's economic growth are in addition to the expectations that the International Monetary Fund announced on 19 April, in which it adjusted its estimates at 0.8 percentage points, from 2.8% to 2%, according to the report on the World Economic Outlook (WEO).

Similarly, the international organization cut its forecasts for next year, as it fell from 2.7% to 2.5%. For his part, the director of the IMF's Department of Studies, Pierre-Olivier Gourinchas, noted that Russia's invasion of Ukrainian territory “will contribute to a significant slowdown in world growth in 2022 and fuel inflation.”

However, expectations for the Latin American and Caribbean region showed a slight improvement of 0.1 percentage points, so growth for 2022 was estimated to be 2.5%. While the agency noted that this region does not have a direct relationship with Russia or Ukraine, it is not exempt from global inflation or financial market restrictions.

This is also in addition to the forecasts made by BBVA Mexico at the beginning of April, when it released its estimates of Mexico's GDP, which had a reduction of one percentage point, since from 2.2% to 1.2%, as indicated by BBVA's chief economist, Carlos Serrano.

Previously, at the end of January 2022, BBVA had reduced its growth forecast for this year, from 3.2% to 2.2%, according to the report “Situación México”. Meanwhile, the Ministry of Finance and Public Credit (SHCP) also reduced its estimates by placing the country's GDP at 3.4% (previously it was 4.1%), while by 2023 it is estimated that it will be 3.5%.

On the other hand, according to the monthly survey conducted by the Bank of Mexico in March, experts from the private sector reduced their forecasts of Mexican GDP growth. In February, specialists calculated a 2.04% increase for the country's economy; however, the following month they adjusted their forecasts to 1.76%.

By 2023, the economy is estimated to grow by 2.08% (up from 2.13% previously forecast). As for inflation, the central bank poll registered an increase for 2022, rising from 4.78% to 5.86%. With regard to the exchange rate, analysts estimated that the peso will stand at 21.20 units per dollar at the end of 2022 (previously the projected estimate was 21.25 pesos per dollar).

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