Mexico | Trade surplus confirms economic slowdown in 4Q23

Summary

The trade balance had not posted a surplus since 2Q21. Given the stylized fact that the trade balance shows a countercyclical behavior, the trade surplus in 4Q23 is another indicator that suggests that the growth of the Mexican economy slowed down significantly by the end of last year.

Key points

• Key points:
• We anticipate a trade balance with a lower deficit in 2024 in relation to last year’s figure (0.3% of GDP) given our expectation for economic growth of 2.5% in 2024 vs. 3.2% in 2023.
• The current account surplus in the fourth quarter of 2023 was higher than the corresponding figure for the same period of 2022 mainly due to the lower deficit in the balance on oil-related goods.
• Net foreign direct investment posted an increase of 32.0% YoY in 2023 when comparing preliminary figures.

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