The Mexican economy shows continuity in its progress: IMEF indicators


The mexican economy shows signs of continuity in its advance, said the Mexican Institute of Finance Executives (IMEF) by interpreting its leading measurements of key indicators of manufacturing production, consumption and services.

On the one hand, the indicator Manufacturing IMEF April registered a rebound of 0.6 points compared to March 2022, standing at 52.5 units and already accumulating three months in the expansion zone, after having fallen below this threshold in January.

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

On the other hand, during April, the Indicator Non-Manufacturing IMEF stood at 53.0 units, thus accumulating three consecutive months above the threshold of 50.0 points.

With the exception of the Product Delivery component, the rest remained in the expansion zone, which for the IMEF suggests that the Non-Manufacturing economic activity maintains a certain dynamism at the beginning of this year.

“The figures of the IMEF Manufacturing and Non-Manufacturing Indicator for the month of April continued to register a level above the expansion zone. This result, together with those of February and March, anticipate a more dynamic start to the year compared to the end of last year”, said the IMEF in its monthly report.

Although the economic context continues to be complex, the increase in mobility and the opening of businesses in the face of the drop in infections by Covid19 has affected greater economic activity at the beginning of this 2022.

So in Mexico continues the economic recoverywhich is evident given the GDP growth at a quarterly rate of 0.9% in the first quarter of the year, according to the timely estimate released by INEGI last week.

At the same time, mobility continues to rise and with that economic activity rises.

The drive from the external sector also continues, where exports show double-digit growth at an annual rate, despite the shortage of some products and bottlenecks in logistics centers.

For their part, remittances continue to reach record highs in the accumulated 12-month period, which contributes to the advancement of consumption and economic growth in Mexico.

The positive variation in Mexico’s GDP contrasts with that of the United States, which contracted 0.4% at a quarterly rate due to the behavior of net exports that registered a historic trade deficit.

The IMEF highlighted that 80% of Mexico’s exports are destined for the United States, so that greater imports from the United States imply greater exports for Mexico.

Despite the progress shown, both in GDP and in other important economic indicators, there are risks that threaten Mexico’s economic recovery.

At a global level, the risks posed by the new confinements in China, the Russia-Ukraine war and the possible accelerated normalization of interest rates in the United States stand out.

From the IMEF’s perspective, the first two elements have the potential to continue generating volatility in commodity prices, congestion in logistics centers, product shortages and significant inflationary pressures.

For its part, the possible accelerated normalization of monetary policy in the United States has the potential to generate changes in investment portfolios that are reflected in volatility in the exchange rate in Mexico.

At the local level, uncertainty prevails due to the reform initiatives that have been and will be promoted (energy, electoral, etc.) and the growing insecurity, among others.

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