Mexico’s economy is set to grow by 3% in 2023, according to the central bank’s monthly survey among private sector economists. This is a significant improvement compared to the July estimation (2.5%) and the largest revision this year. Each month in 2023 the median forecast has been increasing, evident of the resilience of the Mexican economy. The Bank of Mexico itself also expects an expansion by 3% in 2023, as stated in its August monetary policy report. The monetary authority upgraded the May 2.3% forecast because the 3.7% y/y GDP growth in Q2 exceeded expectations and brightened the outlook for the full year’s performance.

The substantial revision of the median 2023 forecast in the central bank’s survey is mainly due to the sustained improvement in consumer and business confidence, both of which are back to pre-pandemic levels. Further, industrial production and retail trade growth accelerated in Q2 to 4.9% and 5.9% y/y, respectively, and are set to keep up the robust performance in the second half, as the confidence indices improve.

The central bank’s August survey reveals upward revisions for the next two years as well, with the median forecast increasing by one percentage point to 1.6% y/y in 2024 and 2.1% y/y in 2025.

The improved outlook positions Mexico among the top performers in Latin America in 2023. According to the IMF forecast from April 2023, Mexico's GDP will grow by 2.6% y/y in 2023, only surpassed by Paraguay and Ecuador. Moreover, given the recently exhibited resilience, the IMF will most probably revise its Mexico GDP forecast in its Autumn World Economic Outlook report.

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