It will not increase GDP in 2023, estimates BofA

CDMX.- Bank of America Securities drastically reduced its economic growth forecast for Mexico in 2023, lowering it from 1% to zero, as a consequence of the expected slowdown in the United States, in an environment of high uncertainty due to high interest rates. interest and the energy conflict within the T-MEC with the United States and Canada.

“We think the main driver will be the US slowdown, partly driven by higher interest rates, which we expect will hit Mexico with a lag. The internal factors that will slow down the activity in Mexico are the higher interest rates, the still strict fiscal policy and the renewed uncertainty given the T-MEC energy dispute,” the firm said.

In the document titled “Mexico: zero growth in 2023, Bank Of America Securities explains that relocation and some resilience in remittances can cushion the slowdown, but the risks are downside for the Mexican economy.

“We do not expect fiscal or monetary policy to react in a countercyclical way,” he stressed.

The firm explained that a greater slowdown is expected in the United States as the Federal Reserve (FED) continues to raise its interest rates.

“Given the high historical correlation in business cycle frequencies between the United States. and Mexico, we expect the US slowdown to spread to Mexico with a delay,” she detailed.

According to Bank of America, despite much weaker growth, its expectation that Banco de México will end 2022 with a reference rate of 9.5% and no cuts in 2023 remains unchanged.

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