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Mexico's economy grows 3.1% in 2022, despite inflationary pressure


The Gross Domestic Product of the Latin American country was driven by industrial activities, mainly manufacturing

A man buys toys in a street market in Mexico City, in January 2022. Gladys Serrano

Mexico grew in 2022 despite an environment of uncertainty and inflation.

The country's economy grew 3.1% last year, slightly better than the 3% previously estimated by the National Institute of Statistics and Geography (INEGI).

In the data published this Friday, the Gross Domestic Product (GDP) advanced 0.5% in the fourth quarter compared to the previous period.

The performance of economic activity in the country was driven by industrial activities, which registered growth of 3.3%, a level not seen since 2010, mainly by the manufacturing sector.

Tertiary activities –where services are located and which contribute the most to GDP– grew 2.8% in 2022, better than the 2.7% initially estimated.

While agricultural work registered a growth of 2.6%.

From last year to date, inflation has been one of the biggest challenges to overcome in the Latin American country.

The consumer price index currently stands at 7.76% during the first fortnight of February, giving a slight breather after the rebound observed in the previous fortnights.

However, the highest price rise in the last two decades has led the Mexican central bank to raise its interest rates to unprecedented levels to curb inflation.

Currently, this reference rate is already at 11%.

The director of analysis of Banco Base, Gabriela Siller, specifies that the revision of the GDP makes it evident that the economic growth of Mexico in 2022 was driven by the secondary sector, mainly by manufacturing where Mexico's exports are located.

The Mexican economy registered a better performance than its neighboring country to the north.

The Gross Domestic Product (GDP) of the United States grew 2.9% at an annualized rate in 2022. The rise in interest rates in that country have slowed down some sectors (construction and home purchase), but have not caused by now the dreaded recession.

For this 2023, market expectations point to a slowdown in growth in Mexico, which would be in a range of 0.3% to 1.8%, according to the most recent Citibanamex survey.

The World Bank also has an estimate of 0.9% growth this year;

while the International Monetary Fund forecasts an advance of 1.7% for Mexico.

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Source: elparis

All news articles on 2023-02-24

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