Moody's predicts imminent recession for Mexico

The Mexican economy will likely fall into recession next year, according to economic research firm Moody’s Analytics, Report informs referring to Mexico News Daily.

Alfredo Coutino, the company’s head of Latin America research, believes there is a growing probability that the global economy will enter a recession in the next 12 months and that Mexico will be unable to avoid suffering the same fate.

In a report, Coutino set out a global recession scenario in which a contraction begins here in the second quarter of 2023 and lasts for a total of three quarters. In the scenario, he anticipated that GDP will shrink 1.7% in the next calendar year, after growth of 1.8% in 2022. The contraction between the second and fourth quarters of 2023 would be 3.4%.

Coutino’s report said the Mexican economy faces a combination of unfavorable events, including the persistence of supply shocks in the global economy, high prices for raw materials and weakening of domestic demand amid the necessity to raise interest rates to combat high inflation.

In the anticipated recession, Mexican families would suffer both from a decline in their purchasing power due to high inflation and higher unemployment, according to Coutino.