Turbulent Global Economy Will Affect Mexico in 2023

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Expect economic turbulence this year on a global scale, with “obvious effects for Mexico,” according to José Domingo Figueroa, the new president of the Mexican Institute of Finance Executives (IMEF), in an interview with Mexican daily newspaper Reforma on Monday, Jan. 2.

Two of the biggest factors that will directly affect Mexico’s economy, according to Figueroa, are the effects of the ongoing war between Russia and Ukraine, and the mild recession that is likely to hit the United States sometime this year.

These two external factors will have a negative impact on Mexican exports and domestic consumption, added the financial specialist, who also teaches postgraduate finance at the National Autonomous University of Mexico (UNAM).

In light of this, Figueroa said he believes it is of utmost importance that Mexico strengthens its own internal economy to avoid being hit hard. The IMEF projects that this 2023, Mexico’s gross domestic product (GDP) will be at a measly 1.2 percent.

Another big problem, according to Figueroa, are the ongoing energy consultations requested by the United States with Mexico (which Canada, later on, likewise requested) under the United States-Mexico-Canada Agreement (USMCA), after the government of Mexican President Andrés Manuel López Obrador (AMLO) reportedly violated energy provisions in the pact. If an agreement is not reached through the consultations, Figueroa said the United States will request the establishment of a panel — or, worse, impose tariffs on Mexican products — which would cost the country billions of dollars and create anxiety among financial institutions in Mexico.

Figueroa’s warning comes on the heels of a report from Mexico’s autonomous ​​National Institute of Statistics and Geography (Inegi) and its corresponding Timely Indicator of Economic Activity (IOAE) that the Mexican economy slowed down at the end of 2022.

Figueroa assumed the national presidency of the IMEF as of this month and will hold the position throughout 2023.

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