The Economic Commission for Latin America and the Caribbean (ECLAC) cut its growth expectation for Mexico and left it at 1.7%, a rate that is below the 2.9% forecast by them in January.
With this correction, ECLAC joins the International Monetary Fund (IMF) and the World Bank who consider that the Mexican economy does not have the capacity to grow this year beyond 2 percent.
As will be recalled, last week the IMF lowered its growth expectation for Mexico to 2%, which is the same level estimated by the World Bank, a rate that approximates the floor of the range updated by the Mexican government in its Economic Policy Precriteria which is between 1.4 and 3.4 percent.
According to economists from the commission, this downward adjustment results from estimating the impact that the country will receive due to the slowdown in global demand, particularly from the United States; the inflationary transmission of the shock represented by the war in Russia and the effect of the rise in prices on consumption and investment decisions.
When presenting the update of economic expectations, the interim president of the commission, Mario Cimoli, highlighted that the effect of the Russian war is received in Latin America and the Caribbean via inflation and the impact that this world escalation of prices has on the capacity consumer purchase.
During his participation in a meeting of the Group of Ambassadors of the countries of Latin America and the Caribbean (GRULAC, for its acronym in English), Cimoli argued that this negative impact of the global context will also be felt in Brazil, which they see as progressing of GDP of 0.4% from 0.5% forecast three months ago.
Snip to the region and the world
As both economies are the ones with the largest share of regional GDP, the commission diagnoses an even deeper slowdown this year, and now expects growth of 1.8% for Latin America and the Caribbean. An expectation that is lower than the 2.1% that they brought in January.
He reported that in the face of global uncertainty, the world’s economic growth will reach 3.3%, which is one percentage point lower than the estimate before the start of hostilities.
Commission experts estimate that the United States, which is the world’s largest economy, will register growth of 2.8%, which is 1.2% below what was projected before the conflict.
For China, the world’s second largest economy, they expect growth of 5%, which is 0.7 points lower than the January forecast.
While for the European Union they expect an advance of 2.8%, which shows a moderation from the 4.2% projected at the beginning of the year.
poverty above
The executive secretary of the commission warned that the increase in imported food prices will have a greater impact on the first three quintiles of the region’s population. This means that the poor will be poorer and the excluded, more excluded.
“The region must strengthen food security mechanisms and involve the private sector in the political response,” he said.