Mexican economy has had a weak start to the year: IMEF

The Mexican economy had a “poor start” in 2022, the Mexican Institute of Finance Managers (IMEF), by interpreting its pre-measurements of key indicators of manufacturing production, consumption and services.

The Manufacturing IMEF indicator January registered a decline of 4.4 points compared to December 2021, thus starting the year at a level of 48.8 units, placing it in a contraction zone for the first time since September 2021.

The indicator IMEF it varies in an interval of 0 to 100 points and the level of 50 points represents the threshold between an expansion (more than 50) and a contraction (less than 50) of economic activity.

In turn, the IMEF non-manufacturing indicator declined by 3.8 points in January to close at 49.0 units, that is, to place itself in a contraction zone for the first time since August last year.

“The figures of the IMEF Manufacturing and Non-Manufacturing Indicator reflect a slow and general start during the month of January, recording a decrease in all its components compared to the end of 2021 (December),” the IMEF said. said in his monthly report.

Indicators indicate a weak start to the economy coinciding with the growing number of Covid-19 infections with the new Omicron variant. It stands to reason that 100% of the IMEF indicator sub-indices fell during January.

As a result, for the IMEF, 2022 again looks like a difficult year from the start.

On the one hand, the growing number Covid-19 infections with the new Omicron variant it affects various activities, such as airlines, with absences caused by people becoming infected and having to isolate themselves for several weeks.

In its latest installment of its World Economic Outlook, the IMF cuts its forecasts for world economic growth in 2022, highlighting downward revisions for the United States, Brazil and Mexico.

On the other hand, the IMEF added as a context, the central banks are starting to change their monetary stance, with the Federal Reserve of the United States as the main character, and expects that a cycle of raising its reference interest rate will begin soon and reduce liquidity in the markets.

After reaching inflationary levels not seen in four decades, the Federal Reserve is preparing to ensure that inflation returns to controlled levels and near the 2 percent target.

Especially for emerging markets, the change in the monetary cycle seen in developed economies will produce a less favorable financial environment than has been the case in recent years.

In Mexico, the most recent indicators point to the weakness of the economy. The timely estimate of GDP for the fourth quarter of 2021, published by INEGI, reveals that the Mexican economy shrank 0.3%, after a decline was already observed in the third quarter.

[email protected]

Leave a Comment