By Ricardo Gallegos, Deputy General Director of Economic Analysis at HR Ratings
The economic environment in Mexico, like many emerging countries, can be relatively volatile due to the economic environment in which we find ourselves. As we have commented in other columns, although the beginning of the year seemed a little lighter than last year, the current internal and external risks, such as the geopolitical tensions that are taking place in the Middle East or the tensions that we see in it. the banking system in the United States of America (HR AAA), could offer variety and variety in the picture of the positive signs that we have seen.
Recently we were able to list several good signs in the local market. On the one hand, we have an example of a real trend towards Tesla’s facility in Nuevo Leon. On the other hand, there is a relative general decrease in inflation and recent data on the behavior of the IGAE, which outlines a good rate of economic growth.
However, what are the challenges and variables that can quickly move and complicate the mission? In my opinion, the geopolitical risk could have a bigger risk, namely: the worsening of the Russian-Ukrainian conflict, which, in addition to the unfortunate conflict itself, has brought consequences for the global economy in the increase of inputs. However, even in Iran, China-Russia developments, Israel and recent nuclear tests by North Korea are creating a climate of instability. These types of risks are usually the impact of the price of oil, gas and food, which do not help the world process of inflation, including, of course, the behavior in Mexico.
In the United States of America, there are two dangers in sight: on the one hand, the financial one, where we have seen how the crisis in the banking system is raising nervousness all over the world. In Mexico, fortunately, the banking system has a better solvency and liquidity metric; but this uncertainty was felt in places. Despite this, the consensus is that the United States could grow by less than 1.5 percent, which directly affects the growth of its main trading partners, including Mexico.
In terms of political risks, we are now entering a period where political positions and parties are of utmost importance. An example of this, and very popular in the media, is that it will be discussed again in the coming months whether or not to increase the debt chamber, whether or not to comply with the obligations of the American federal government. a risk, a situation that is presented on other occasions, but does not add to the economic-political stability of the region.
How long will the Mexican economy last? It depends on the depth of the effect, but it appears that the greatest dangers are more external than internal in nature. Through 2023, we will continue between this dichotomy of inflation and growth. About the first, there are the first signs that the process of increasing the user can reduce it, but, since it is still so far from the goal of the central bank, there is room for a little growth before it starts to go down. . On the growth side, our estimate remains around 1.46%, in line with the estimate of growth in the US, which we estimate at 1.03% this year.
It is clear that we must be aware not only of our economy, but also of external risks and how they affect our indicators, and above all: what we can do to mitigate them. for a time