Analysts estimate Mexican GDP growth at 2% by 2023

private sector analysts they improved the growth estimate of the gross domestic product (GDP) to 2% of Mexico by the end of 2023, reported this Tuesday -Citibanamex.

By 2024, the most recent “Citibanamex Survey of Expectations”, conducted among 36 analysis groups from different banks, brokerage houses and other “traders” and “brokers”, maintains the advance forecast at 1.7%.

The estimate of private analysts ranges from a maximum of 2.7%as expected by XP Investments, and a minimum of 1.4% from Bursametrica Group.

For the coming year, expectations for the Mexican economy range from 2.8%, as foreseen by the GBM, to zero growth estimated by Bank of America.

According to the estimates of the Mexican Government, the GDP growth expected for 2023 is 3%according to its General Economic Policy Precriteria 2024.

Recently, the undersecretary of the Ministry of Finance and Public Credit (SHCP), Gabriel Yorio, said that the country has a growth floor of 2.3% for this year, so he did not doubt that his forecasts for the end of 2023 will be met.

For its part, the Citibanamex survey showed that there is now a consensus among specialists that the Banco de México (Banxico) will reduce the interest rate by 25 basis points target up to 11% by the end of 2023.

The most recent monetary policy decision gave pause to the bullish cycle of interest rates in Mexico, while private specialists estimate that the first cut will take place in the last month of the year.

“The consensus median estimate for the year-end 2023 target rate decreased to 11% from 11.25% a fortnight ago, while by the end of 2024 it remained at 8.5%”, reads the Citibanamex publication.

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The Citibanamex survey also reflected that the annual general inflation expectations for the end of 2023 decreased to 5% from 5.1%.

Regarding core inflation, which excludes highly volatile products such as energy, the analysts consulted expected it to remain at 5.3% for the second consecutive fortnight.

By 2024, projections for the Headline inflation remained unchanged at 4%, even above the Banco de México target rate of 3%.

Also, the survey anticipated a “stronger” exchange rate with a consensus among private analysts of 18.7 pesos per dollar at the end of 2023, from a previous one of 19 units per greenback.

For next year a close of the Mexican peso is expected at 19.90, slightly less than the 19.93 pesos of its last edition.

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