Background on Banco de México
Banco de México, often abbreviated as Banxico, is the central bank of Mexico. Established in 1925, it is responsible for implementing monetary policy, managing foreign reserves, and supervising financial institutions. As the country’s central bank, Banxico plays a crucial role in maintaining price stability and ensuring the smooth functioning of Mexico’s financial system.
Revised Growth Forecast
Banxico has recently revised its Gross Domestic Product (GDP) growth forecast for 2023. The bank now projects that Mexico’s economy could experience a growth range between -0.5% and 0.7%. This updated outlook reflects a downward adjustment from the previous estimate of 0.6% projected in February.
Historical Context of the Revision
- In February, Banxico anticipated a GDP growth rate of 0.6%.
- The new projection includes the possibility of a more severe contraction, down from -0.2% estimated in February to as low as -0.5%.
- Previously, Banxico projected a maximum growth rate of 1.4%.
Market Expectations
According to Citigroup’s survey of market expectations, the average GDP forecast for 2023 stands at 0.10%. Out of 15 experts surveyed, 15 anticipate an economic contraction.
Key Questions and Answers
- Who is Banco de México? Banco de México (Banxico) is the central bank of Mexico, responsible for implementing monetary policy, managing foreign reserves, and supervising financial institutions.
- What is the revised GDP growth forecast? Banxico now projects that Mexico’s economy could grow between -0.5% and 0.7% in 2023, down from the previous estimate of 0.6%.
- What does this revision imply? The updated outlook reflects a more pessimistic view of Mexico’s economic prospects, with the possibility of a deeper recession than initially anticipated.
- What are market expectations for Mexico’s GDP growth? According to Citigroup’s survey, the average market expectation for Mexico’s GDP growth in 2023 is 0.10%, with 15 out of 15 experts predicting an economic contraction.
