Mexico Economic Outlook. June 2024

Summary

We will review our growth forecasts for 2024 and 2025 once the reform of the judicial system is known, which could have significant impacts on investment

Key points

• Key points:
• Consumption shows dynamism driven by gains in real wages and real wage bill, and the advancement of transfers from social programs during 1H24.
• The slowdown in the creation of formal employment is confirmed. A slight rebound is expected during the third quarter, but the year will close with levels lower than those of the last three years.
• Core inflation continues to slow despite the downward rigidity that services inflation continues to show.
• There is ample scope to gradually normalize the monetary stance but we anticipate that it will remain highly restrictive for the remainder of the year and into 2025 despite the gradual tapering cycle.
• We estimate that public debt increases to 51.3% at the end of 2024 vs. 46.8% of GDP in 2023 due to the higher public deficit and the higher exchange rate estimated for the end of the year.

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