Economics: Economy starts to lose steam on some fronts as we gear up for a challenging 2023

MEXICO - Report 23 Dec 2022 by Mauricio Gonzalez and Francisco González

In this, our final issue of 2022, we provide an overview of the main economic data published in December. The headline number were the strong GDP results for the third quarter on the strength of a considerable expansion of services and an extension of manufacturing’s positive trend as some of the highest value added branches of manufacturing scored improved numbers. However, the construction industry remained deeply depressed.

Challenges continue to loom on essentially all fronts and the latest strong readings are unlikely to last for long with the US economy expected to slow or even enter into recession and the toll that it could take on industry in Mexico. Moreover, as we have entered in what is expected to be a prolonged period of higher interest rates in major economies that also extends to Mexico, where Banxico’s monetary policy has been one of anticipating and matching Fed rate moves. In this context, some sectors in Mexico such as the long beleaguered construction industry have yet to show a positive trend change, at least for the near term, with growth likely to prove weak yet again next year.

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