Mexican Economic Outlook Weighed down by Expected Drop in US Trade

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Mexico’s economic outlook is weighed down by an expected drop in trade with the United States and potential declines in consumer spending and investment, a Mexico City-based global rating agency said last week.

The possibility that new investment driven by nearshoring trends may not be materialized was also dampening the economic forecast, HR Ratings said.

“We expect real gross domestic product to decelerate to 2.1 percent annually in 2024 as a result of restrictive monetary policy and an expected deceleration in the growth in the United States that will slow part of the dynamism from external demand,” HR Ratings said in w written report.

According to its updated economic forecast, 2023 will see a growth of 2.7 percent, largely driven by the services sector, which has been one of the main pillars of Mexican economic activity in recent quarters.

While the global economy continues to undergo a post-pandemic recovery process marked by a rebound in consumer spending on goods and services, central banks around the world continue to tighten monetary policies to curb inflation.

With that in mind, “for 2023 and 2024, an economic slowdown is anticipated worldwide with respect to the growth observed in 2022,” the agency said.

“The Mexican economy is exposed to a volatile international situation, especially in regard to its main trading partner (the United States), which to a certain extent reflects the impacts on the trajectory of global growth,” it said.

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