The dynamics that the Mexican economy maintains in the first quarter of the year fuels growth expectations of 3% throughout 2023, agreed analysts from Banco Base, Monex, Finamex, Goldman Sachs, J.P. Morgan and Pantheon Macroeconomics.

Among them five, who has the highest forecast is J.P Morgan, which is at 3.2%; very close are the revised expectations of Finamex; Pantheon Macroeconomics and Banco Base that are at 3% as well as those of Goldman Sachs and Monex that coincide at 2.9%. They warn that there will be a slowdown in the second half of the year, but rule out a recession scenario.

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J.P. Morgan, who projects the highest growth expectation, considers that upward risks persist for the second half and next year. The solid position of public and private consumption; public construction and manufacturing production driven by the automotive sector.

Casa de Bolsa Finamex relied on the positive performance of construction, particularly civil engineering works that could respond to the megaprojects of the current administration.

The international consultancy Pantheon Macroeconomics highlighted that the outlook for the future is mixed. The gradual drop in inflation makes it possible to anticipate rate cuts for the fourth quarter that could facilitate a rebound in household spending, he said.

But he pointed to the volatility of manufacturing activity, the weakening of the flow of remittances and the increase in political uncertainty as major threats. Thus, they anticipate that economic growth will achieve an annual advance of 2.9%, just like Monex.

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For its part, Monex pointed to the higher financial cost due to high interest rates, as a factor that will end up weakening consumption, which will be seen in the second semester and in the course of next year. They believe that the performance of GDP so far does not incorporate nearshoring expectations.

Finally, Banco Base is of the opinion that despite the expectation of solid growth, there are several internal and external risk factors that could deviate from its expectations. Domestically, the uncertainty generated by economic policies cast doubt on confidence in institutions and the rules of the game for investment.

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Original note