Background on the Committee and its Role
The Committee for Closing Economic Cycles, established in May 2021 under the auspices of the Mexican Employers’ Confederation (IMEF), was created at the request of the National Institute of Statistics and Geography (INEGI). The committee’s mission is to identify turning points, peaks, and troughs in economic activity, as well as the duration and depth of each phase. The committee aims to maintain neutrality in its analysis.
Committee’s Track Record
Since its inception, the committee has identified six recessions and five complete economic cycles from 1980 to 2020.
Recent Meeting and Uncertainty on Recession
In a recent meeting held on May 5, the committee deliberated whether available indicators suggest a new turning point marking the end of the expansion phase initiated in June 2020 and the beginning of a recession.
The committee considers three criteria to determine economic expansion or recession: diffusion (the shared trend among most economic activities), duration (maintaining the direction for a sufficient period), and depth (the level of change in economic activity).
Key Criteria and Current Economic Status
- Diffusion: The committee examines the overall trend across various economic sectors.
- Duration: The committee assesses whether the economic direction persists long enough and to what extent.
- Depth: The committee evaluates the level of change in economic activity.
Currently, the committee has not found sufficient evidence “without a doubt” to confirm the start of a recession based on these criteria.
Committee’s Relevance and Impact
The Committee for Closing Economic Cycles plays a crucial role in providing insights into Mexico’s economic health. Its findings help policymakers, businesses, and the general public understand the current economic situation and anticipate potential changes.
Given its neutrality and the respected economists involved, the committee’s assessments are widely regarded as credible and influential in shaping economic expectations.
Key Questions and Answers
- What is the Committee for Closing Economic Cycles? It’s a group of notable economists established by the IMEF to identify turning points, peaks, and troughs in Mexico’s economic activity.
- What criteria does the committee use to determine economic phases? The committee considers diffusion, duration, and depth of economic changes across various sectors.
- Has the committee identified a recession start? Not yet. The committee has not found sufficient evidence to confirm a recession “without a doubt” based on their criteria.
- Why is the committee’s assessment important? The committee’s findings provide valuable insights for policymakers, businesses, and the public to understand Mexico’s economic health and anticipate changes.
