La Jornada – “Limited”, Effects of a slowdown in Mexico: Credit Suisse

Mexico City. Credit Suisse said that the effects of the global economic slowdown will be “limited” in Mexico for other emerging economies, although this does not exclude that activity loses dynamism next year.

“In Mexico, the economy is likely to continue to show limited macro-vulnerabilities in 2023, compared to many other emerging economies. Economic growth is likely to slow materially as in most countries around the world.”

However, on the positive side, he said, Mexico’s external and fiscal imbalances, as well as its general level of political uncertainty, are likely to remain more contained than comparable countries.

“Mexico should continue to benefit from the narrative of near authorship,” he said, “even if the concrete results of this process are still unclear and will take time to materialize.”

He considered that the main sources of risk related to the magnitude of the slowdown in economic growth in the United States and judging the demands of Canada and the United States on the T-MEC.

According to the document Economic Outlook 2023: Weak growth, higher rates, no Cuts, the global economy will weaken by 2023 as Europe and the United States slow down.

Despite this, he said, it is likely that major central banks will continue to raise interest rates at least through the first quarter, and this combination suggests that risk appetite has room to decline.

Consequently, the bank said, industrial momentum will turn negative as liquidity conditions tighten.

Credit Suisse pointed out that in the midst of this situation, the United States Federal Reserve (Federal Reserve, in English for short) is likely to be able to stop its rate hike towards spring, followed by the European Central Bank; However, none of them are expected to lower rates until 2024.

The US could be the first to convincingly see inflation slowing along with waning wage growth, but more so in the second half than in the first. Lower inflation in Europe and Japan will be held by higher wage pressure.”