It is likely that one US recession almost certain next year take to the Mexico’s economy to a contractionas shown by models from Bloomberg Economics.
Bloomberg models give a 100 percent chance regarding what America falls into recession in the next 12 months as it is “hard to imagine” the Federal Reserve reining in inflation without causing a contraction, Bloomberg US economists Eliza Winger and Anna Wong wrote on Monday.
Under those circumstances, Mexico’s economy “should steadily lose momentum before falling” in the second half of 2023, Felipe Hernández, Bloomberg Latin America economist, wrote last week.
For Mexico, “following a brief and shallow recession, the growth would pick up quickly in 2024″ Hernandez wrote.
US models do not take into account the size of the slowdown, but President Joe Biden’s prediction that “any recession will be ‘very mild’ might end up being correct,” Winger and Wong write. There is no guarantee that the models are correctnoted the three economists.
Mexico will import US recession in 2023
Mexico has become more dependent on the United States during the pandemic, as President Andrés Manuel López Obrador refused to increase spending to prop up the economy.
As such, your recovery has depended largely from the US consumer demand and of the foreign companies investing in Mexico in order to serve the United States.
Both factors would be hampered by the downturn in the US economywrites Hernández, like the remittances sent home by Mexicans living in the United States who have helped keep the country afloat.
“A recession in the United States would be a significant shock. The America’s recovery from the pandemic has been one of the few Mexico’s growth engines since the outbreak,” Hernández wrote.
