Mexico, the one that will grow the most in North America: IMF

The International Monetary Fund (IMF) predicts that Mexico will grow 3.2% this year and 2.1% by 2024, which places it above the United States and Canada.

The international organization foresees that The North American region as a whole, including Puerto Rico, will grow 2.1% this year and 1.5% in 2024.

For Canada's projections are for an increase in its economy of 1.3% and for the United States of 2.1 percent. by 2023.

In the case of Mexicoit was explained that “the delayed recovery from the covid-19 crisis is now widespread and sectors that were previously lagging, such as services and construction, are now leading growth factors.”

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In addition to this, The labor market in the country is very solid, and inflation is declining thanks to lower global prices of raw materials, as well as the early reaction of monetary policy.”

In the outlook report for the Western Hemisphere region, The IMF recognizes that the Bank of Mexico is committed to continuing to keep inflation under control and announced a stable policy rate for an extended period. “This implies an adjustment in real terms, which is appropriate given the risks related to service prices and the growth of formal wages.”

The IMF estimate is that annual inflation in the country will close at 4.5 percent in 2023 and will be at 3.2 percent for next year.

About him 2024 budgetwhich foresees a significant expansion of fiscal stance followed by a large fiscal consolidation in 2025opined that the authorities face difficult options to comply with the expected medium-term fiscal trajectory.

REFORMS TO STAND OUT

Despite this, he recognized that Mexico is very well positioned to benefit from the trend of relocation of companies or nearshoring, but it needs deeper structural reforms to attract more foreign companies to the country.

These may include policies that facilitate women's labor participation, addressing impediments such as crime, regulatory obstacles, lack of access to finance, and reducing the costs of formalization.

For Latin America, the Fund anticipates economic growth of 2.3% both this year and in 2024 and places Mexico, along with Brazil, as the two economies that have given the greatest push to the region.

In fact, Brazil would grow at a rate of 3.1 percent in 2023 and 1.5 percent in 2024projections below those that the IMF has for the Mexican economy this and next year.

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