Macro Analysis /

Mexico: Ahead of the Curve

  • Attention on the approval of the 2023 Spending Budget, with reserves currently being discussed in the Lower House

  • September’s Timely Indicator of Economic Activity will likely be revised up, in line with implied figures in 3Q22 GDP

  • However, the print for October might be more modest, with adverse signs for manufacturing despite

Juan Carlos Alderete Macal
Juan Carlos Alderete Macal

Director of Economic Research

Francisco Jose Flores Serrano
Francisco Jose Flores Serrano

Senior Economist, Mexico

11 November 2022
Published byBanorte

Economic dynamism likely extended to 4Q22

Weekly international reserves (November 11th); previous: US$196.7 billion. Last week, net international reserves decreased by US$184 million, closing at US$196.7 billion. This was mainly due to a negative valuation effect in institutional assets. Year-to-date, central bank’s reserves have fallen by US$5.7 billion.

Timely Indicator of Economic Activity (October); previous: 3.3% (sa). This release will include the first estimate for October, as well as revised figures for September. We recall that August’s mid-point forecast stood at 3.2% y/y (using sa figures), much lower than the 4.7% in the GDP-proxy (IGAE). Although it is likely that September will be revised upwards due to stronger dynamism implied in 3Q22 GDP, the industrial production’s fall in the period could skew it. Going to the tenth month of the year, signals are somewhat mixed. Regarding prices, inflationary pressures in food items continued, albeit with LP gas lower. Meanwhile, US figures showed a moderation, consistent with the deceleration in IMEF’s manufacturing PMI. Nevertheless, services could be more resilient, as suggested by the local non-manufacturing indicator and with ANTAD sales gaining pace. As such, activity could advance modestly in sequential terms.