Forecast for the Mexican economy 2022
In this article you will find a summary of the main financial movements in 2021, as well as an idea of the behavior of the financial market in 2022.
In the three months to September 2021, Mexico's economy shrank by 0.4% in the quarter against a preliminary estimate of a 0.2% decline. This was the first reduction in four quarters: the volume of services decreased by 0.9%, exceeding the forecast by 0.6%. The spread of the Delta coronavirus variant in the third quarter made it difficult to provide services, leading to closures and restrictions on restaurants, shops and other public places.
On the other hand, the raw materials industry grew by 1.3%, which exceeds the preliminary estimate of 0.7%, and the industrial sector grew by 0.3% against the preliminary estimate of 0.7%. Secondary activity has suffered due to bottlenecks in the global supply chain and a shortage of semiconductor chips, which has affected the automotive industry, which accounts for 18% of production in Mexico and a third of total export sales. The economy grew by 4.5% year-on-year, which is slightly lower than the initial estimate of 4.6% (Source: National Institute of Statistics and Geography, INEGI).
Mexico's average inflation in November was 7.37% year-on-year, the highest in more than 20 years and more than double the Central Bank's target. Banxico's goal was inflation at 3% with an acceptable range of one percentage point above and below this level. In December, inflation barely improved to 7.36%.
Mexico's government has announced it has reached an agreement with business groups to raise the minimum wage by 22 percent this year as it continues efforts to narrow the country's yawning wealth gap. The central bank, which raised its benchmark interest rate by 50 basis points to 5.50% at its December meeting, expressed the concern of most members about this minimum wage increase, which could put pressure on the cost of labor, according to Reuters.
Some stable indicators:
- The unemployment rate, which fell to 3.7% in November from 3.9% in October.
- Business confidence rose by one tenth to 52.7 in December
- The manufacturing PMI remained at 49.4 points.