Mexico’s economy is expected to grow 3.5% this year due to the behavior of the U.S. economy and the strength of the services sector, BNP Paribas said.
“The initial forecast contemplated a recession in the United States that not only has not materialized but could even be much shallower than expected.” “Now, its current estimate is even higher than the Finance Ministry’s estimate of 3%,” BNP Paribas said.
“In addition, although it is quite high, it is due to factors that are related to sectors such as services, which are showing a recovery this year with respect to pre-pandemic levels,” Pamela Díaz, economist for Mexico at the financial institution, said in an interview.
She stressed that consumption in Mexico has been one of the elements that has contributed most to the performance of the economy.
“Although a slowdown is expected in the second half of this year, it will be “enough” and more limited than BNP Paribas anticipated,” Díaz said.
With this, instead of observing quarterly increases at an annual rate of one percent, increases of between 0.5% and 0.6% would be seen.
By 2024, BNP Paribas had also raised the expectation of economic growth from one to 1.3 percent.
On the other hand, Díaz mentioned that headline inflation in Mexico continues to fall faster than expected, but core inflation has shown resilience.
“This could eventually widen the gap between headline and core inflation,” Díaz warned.
