Banxico highlights "weakening" of the economy in the last quarter of 2023

MEXICO CITY.— The Bank of Mexico (Banxico) warned this Thursday of “a weakening” of the economy “in all regions, especially in the south” of the country, faced with a industry setback.

The central bank recognized in its ‘Report on the Regional Economies, October-December 2023‘that in the fourth quarter of 2023 “the economic activity showed low growth” despite the 3.2% annual growth of the gross domestic product (GDP) throughout the year.

Significant slowdown at the end of 2023

“The significant slowdown at the end of 2023 “Regarding the dynamism observed in the first three quarters of the year, it was a reflection of a marginal decrease in industrial production and the low growth of tertiary activities,” he noted in the report.

The autonomous body considered that “the lower dynamism of the Mexican economy” at the end of 2023 was the product “of a weakening” of the three sectors, “in particular” of secondary activities, which decreased by 0.13% compared to the previous quarter. .

Banxico recalled the figures of the National Institute of Statistic and Geography (Inegi), which in February reported a definitive growth of 3.2% of GDP in 2023, but From October to December the economy only rose 0.1% quarterly.

“Thus, at the end of the year, the national economy presented a significant slowdown,” the central bank now indicated.

He also concluded that in all regions there was “a weakening” in tertiary activities, such as commerce or tourism.

While agricultural production “exhibited a significant contraction” in the central-northern area, in part, due to the drought.

Main risks

Business executives consulted by Banxico highlighted how main risks that they deteriorate public safety indicatorsthat uncertainty generated by the elections in 2024 is greater than expected, and that the inflation at high levels.

Likewise, they fear “that adverse weather events for regional economic activity.”

Still, the Bank of Mexico He clarified that “regional economies are expected to continue expanding, despite facing a complex and uncertain environment that poses important challenges for its growth“.

Main adversities

Among the main adversities, the organization pointed out “the possibility of a economic slowdown in the United States“, which would especially affect states in the north of the country and central regions “with a clear export vocation or also those that receive a significant flow of remittances.”

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