Mexico’s Latest Economic ‘Moment’ Might Be Just That

Mexico’s Latest Economic ‘Moment’ Might Be Just That
Mexican President Andres Manuel Lopez Obrador gives a press conference to reporters at the National Palace in Mexico City, Mexico, Jan. 4, 2023 (photo for Eyepix/NurPhoto by Luis Barron via AP Images).

Amid an uncertain global economic environment, Mexico has had a surprisingly good year, with a promising outlook ahead. Growth forecasts for 2023 have been revised upward by the International Monetary Fund, World Bank and the OECD in recent months and currently range from 1.8-2.6 percent. Though far from spectacular, that’s sturdy enough at a time when recession haunts a number of developed economies.

Meanwhile, inflation has edged downward every month since January and now hovers at 5 percent, easing pressure on policymakers and the Central Bank. And both GDP and foreign direct investment flows are back to prepandemic levels, while the Mexican peso has appreciated by over 10 percent against the dollar this year.

Mexico’s strong macroeconomic fundamentals contrast starkly with many of its peers, both in Latin America and around the world, which are experiencing a debt hangover following the pandemic and a spike in inflation due to the economic fallout of the war in Ukraine. And what’s more, Mexico stands to be one of the primary beneficiaries of so-called nearshoring in the Americas, brightening its economic prospects for years to come.

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