National Bureau of Statistics reports 3% economic growth in 2022

Mexico’s economy grew for the second year in a row in 2022 after a sharp drop in GDP in 2020 due to the COVID pandemic and associated restrictions.

The national statistics agency INEGI reported on Tuesday that GDP expanded by 3% on a seasonally adjusted annual basis last year.

This number is based on preliminary growth data for Q4 2022 and is subject to change when final data is released on February 24.

Economic expansion in 2022 will follow 5% growth in 2021, with GDP 8.5% contraction in 2020.

Gabriela Siller, director of economic analysis at Banco Base, said the 3% growth recorded last year shows the economy has fully recovered from the economic crisis caused by COVID.

Alfredo Coutinho, director of Latin America at Moody’s Analytics, said the Mexican economy “did not disappoint in 2022 as it outperformed expectations.”

The central bank has raised interest rates to record highs in 2022 to curb high inflation.

The 3% growth occurred against a sustained economic background. high inflation When record high interest rate The Bank of Mexico tightened monetary policy in an attempt to put downward pressure on rising prices.

Nearshoring — the movement of companies to Mexico to get closer to the U.S. market — has benefited the economy in 2022, Shiller said, but growth could have been 2.5% if the phenomenon had been better exploited. It could have been even higher.

Deputy Finance Minister Gabriel Yorio said on Monday that consumption and private investment have benefited the economy in recent months, and forecast higher wages and better working conditions to boost growth this year.

INEGI’s preliminary data for the fourth quarter of 2022 showed that GDP expanded by 0.4% compared to the third quarter and 3.6% compared to the last three months of 2021. Q3.

Nevertheless, GDP has now increased for five straight quarters.

The agriculture sector supported growth in the fourth quarter with economic activity increasing 2% quarter-on-quarter and up 6.3% on an annual basis. However, the manufacturing sector outperformed the agriculture and services sectors throughout the year, recording his annual growth rate of 3.2%. The agriculture and services sectors expanded by 2.8% and 2.7% respectively.

avocado processing plant
Agriculture was the growth driver in Q4 2022, according to INEGI data. (Gob MX)

Janez Quiros, deputy director of economic analysis at Monex Financial Group, tweeted that the possibility of stagflation (high inflation, low growth and high unemployment) plaguing the economy is “virtually ruled out,” considering the latest data. It was done,” he said.

Mexico is not expected to enter recession, although a slowdown is expected in 2023 amid challenging global economic conditions.

The International Monetary Fund on Monday raised its 2023 GDP growth forecast for Mexico to 1.7% from 1.2%. Meanwhile, the World Bank now forecasts a 0.9% expansion “as restrictive financial conditions, persistently high inflation and soft exports constrain activity”.

The federal government is more optimistic, predicting 3% growth in 2023.

in a report from El Financiero, Elle Economista bloomberg When Reforma National Bureau of Statistics reports 3% economic growth in 2022

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