Experts warn that the risk of a recession in Mexico is very high if the United States falls into a recession

EFE. Analysts warned of the risks posed by the possibility Recession in United State to Mexican Economydespite earlier positive data on GDP growth of 1% quarterly and 2.1% y/y (Gross domestic product) from Mexico.

Danger Recession Gabriella Celler, Director of Economic Analysis at Banco Base, said at a conference:

I read here: The Mexican economy grew by 1% in the second quarter of 2022: Treasury

In his presentation of his economic prospects for Mexico, Sealer explained that 30% of Gross domestic product Mexico depends on the growth of the US economy, being the main trading partner.

He explained that 40% of Mexico’s GDP It is based on exports, 94% of which is non-oil, 80% of this trade goes to the United States.

For this reason, he commented, “It is not appropriate to deteriorate trade relations with that country,” referring to the fact that treaty partners between Mexico, the United States, and Canada (USMCA) Consultations began last week on differences with Mexican energy policy.

Similarly, the academic also from Tec de Monterrey considered that up to 20% of manufacturing jobs could be lost due to the US-Mexico conflict under the T-MEC, as well as the application of tariffs.

National Institute of Statistics and Geography (inigi) This Friday revealed that Mexican GDP It grew 1% quarterly and 2.1% from April to June, which is a 2% increase in the first half of the year.

You can read: The Mexican Peso accumulated a loss of 1.3% in July; BMV had its best month since March

The rise in Mexico’s GDP from April to June 2022 contrasts with a 0.2% decline in the second quarter of the United States, which has accumulated two consecutive periods of contraction.

According to Base Bank analysis, the Mexican economy will grow by 1.6% at the end of 2022 and 0.7% in 2023 in a base scenario, which would make a full recovery to 2018 levels in the last quarter of 2023.

Fitch Ratings Director for Latin America, Carlos Morales, also considered in a comment shared with Efe that the current slowdown in the US economy “represents a major risk to Mexico’s growth prospects.”

He also noted that investment “will remain a burden” on the development of the Mexican economy, as “the increase in global uncertainty and political interference is undermining business confidence.”

While Jose Ignacio Martinez, coordinator of the Laboratory for Trade, Economics and Business Analysis (Lacen), argued that “in the second half of 2022 there is no forecast for the growth of the Mexican economy” in light of the recession in the United States and China.

Read also: Eurozone inflation reached 8.9% in July, the highest level in 25 years

Leave a Reply

Your email address will not be published. Required fields are marked *