According to the Chinese horoscope, a new astrological year begins on January 23, which will be the cycle of the water rabbit in Chinese culture, which symbolizes longevity, peace, prosperity, intelligence, abundance and sagacity, so it is expected that 2023 is a year of hope.
Every year we make a forecast effort that we summarize in the top ten forecasts for the world economy and for the economy of Mexico.
Top 10 forecasts for the world economy:
1. The global GDP will grow at a slower rate than in 2022, being able to reach a growth of 1.4 percent per year.
2. Global inflation will tend to drop for the second year, although factors that will put pressure on it on the supply and demand sides will still prevail.
3. Central banks will continue to tighten their restrictive measures, raising their rates slightly above their neutral levels and reducing their balance sheets. In the second half of the year, banks are expected to pause and keep their reference rate levels unchanged.
4. The dollar will remain strong as a result of the restrictive policy of the Fed and the contraction of the supply of dollars. The rest of the markets will continue their downward trend due to the recession in the US and Europe, but we see a recovery in the markets in the second half.
5. The US economy will have a slight recession starting in the second or third quarter, and will have a GDP variation of between -0.5 to +0.5 percent per year.
6. The Euro Zone will have a recession since the beginning of the year and its GDP will fall between 1.5 and 1.0 percent annually.
7. The United Kingdom, with inflation close to 10 percent in 2022, will also have a recession from the beginning of 2023, with a drop in GDP of 0.8 percent per year.
8. In Japan, it seems probable that the Central Bank begins a gradual disarticulation of its extreme monetary policy and will have an annual growth of 1.3 percent in GDP.
9. China: With a relaxation of its anti-covid policy, and taking advantage of the normalization of supply chains and its relationship with Russia, we see an annual increase of 2 percent in GDP.
10. Latin America, including Brazil: We see a slowdown with GDP growing around 1.5 percent per year.
Top 10 forecasts for the Mexican economy:
1. Economic activity will enter a recession in the second half of the year, impacted by the US recession, so that throughout the year it will have a fall of between 0.5 and 1.0 percent per year. The recession might last until the first quarter of 2024.
2. Banco de México will continue with its increases in its reference rate during the first quarter, placing its terminal rate at 11 percent per year. Then it will maintain its reference rate, keeping the 600 basis point spread over the Fed.
3. The contraction in the dollar flows of manufacturing and agricultural exports, tourism, family remittances and foreign direct investment will influence the price range of the peso to rise from the range of $19.05-$20.75 to $20.80 -$22.10 for the second half of 2023.
4. Inflation will maintain a gradual downward trend, although core inflation will show greater downward resistance. The higher level of the exchange rate will also influence inflation during the second half of the year. We expect inflation to end at 5.50 percent per year.
5. The fiscal deficit will be higher than 4.1 percent of GDP, given the economic recession, with which the collection goal of 9 percent in real terms will not be able to be reached. The SHCP will have to make an adjustment to the budget in the second half of the year, following the elections.
6. Formal employment in the IMSS will reach an increase of 350 thousand jobs throughout the year, with a positive creation in the first semester and a loss of jobs in the second half of the year due to the recession, reaching an unemployment rate of 4.3 percent for the end of the year.
7. Foreign Direct Investment will maintain a positive flow in the first half of the year, but will have a much smaller flow in the second half.
8. Family remittances will fall to 4 billion dollars per month on average in the second half of the year. In the year they will add 48 billion dollars with an annual fall of 17 percent.
9. Foreign direct investment will present a drop of regarding 35 percent in the face of the recession and the lower supply of industrial parks.
10. The holding of government securities in the hands of foreign residents will continue presenting a more accentuated net outflow in the second half of the year, to accumulate a decrease of 10 billion dollars in the year.
