Mexico | The Mexican economy is growing at a good pace

Summary

Everything indicates that the country's economic growth in the first half of this year will be good and higher than expected. The year's first quarter growth (QoQ) was 1%, which implies a growth rate greater than 4% in annualized rates

Key points

• Key points:
• This performance is due, first of all, to the robustness of consumption explained by the labor market's strength. Today the unemployment rate stands at 2.8%, a historically low level and less than the 3.6% observed before the pandemic
• Not only are there more jobs in Mexico, but they are also better paid: the average real wage has risen by about 6% since January of last year, partly due to increases in the minimum wage and partly due to wage pressures that result from the lowest unemployment rate
• Another factor behind the good economic performance this year is the solid pace of manufacturing due to the surprising resilience of the US economy
• At BBVA, we estimate that if the US economy enters a recession in the second half of the year (our baseline scenario), growth in 2023 would be 2.4%. But if the US economy manages to avoid recession, the Mexican economy could grow at 3% or more

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