The Mexican economy could present zero growth in the medium and long term; by 2023, the country will barely recover the levels of 2020, which will translate into “four lost years ”, said Carlos Morales, director of sovereign ratings at Fitch Ratings in a presentation at the 16th Asofom Convention.
He pointed out that according to his projections, if the expected growth in the coming years is compared, from 2020 to 2023, Mexico is the country that would grow the least during these years.
“Our expectation is that the average growth would be zero; that is, by 2023, the GDP would only recover the level of 2020, which indicates a loss of 4 years of growth compared to other countries that are growing year after year above the contraction of 2020″, stated Carlos Morales.
Another challenge that stood out in the context of the Mexican economy is high inflation and the continuous increase in inflationary risks.
Thus, the rating director of the securities rating agency assured there is a probability that Mexico’s rating will change between the next 12 and 24 months.
He argued that if issues related to the rule of law, corruption, and political instability in decision-making, among other factors, are resolved, the country’s sovereign rating would be 2 rungs higher than it is at the moment (BBB – with stable outlook).
The US can ‘drag’ Mexico and cause the economy to grow only 1% in 2023: Moody’s
Moody’s agency indicated that the Mexican economy would be affected by the slowdown projected in the United States.
The rating agency adjusted the growth expectations of the countries that make up the G-20 and where it highlights that for Mexico they would expect an advance of 2 percent this year and 1 percent for 2023, which contrasts with the projections of May, where they predicted a growth of 1.8 percent this 2022 and 2 percent for 2023.
“In Mexico, economic activity in the first half of 2022 expanded 1.9 percent, supported by demand for US exports. However, we expect a slowdown in the second half of 2022 and into 2023, in line with US economic trends, in addition to the drag on consumption due to still high inflation and tighter monetary policy. Therefore, we expect growth for 2023 close to 1 percent”, Moody’s added.
For the US, they project a growth of 1.9 percent for this 2022 and 1.3 percent for 2023, while in May they estimated growth of 2.8 and 2.3 percent.
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