Daily Management Review

Mexican Finance Ministry raises growth forecast for 2022


The Ministry of Finance of Mexico has submitted to the parliament a draft budget for next year, which forecasts GDP growth of 4.1%, while previously the authorities estimated it at 3.6%.

Esparta Palma
Esparta Palma
"Public finance forecasts for 2022 use a GDP growth rate of 4.1%. The implied price of the Mexican export blend (oil - ed.) is $55.1 per barrel and the volume of oil production is 1,826 thousand barrels per day," the ministry said in a statement.

Ministry experts expect annual inflation in 2022 to reach 3.4%, the average interest rate will be at 5% and the national currency exchange rate will be 20.3 pesos per U.S. dollar.

In April 2021, the Mexican government projected more moderate GDP growth of 3.6% in 2022; the Central Bank's baseline scenario predicts growth of 3%, with possible variations in the range of 2-4% due to the uncertainty of forecasts due to the ongoing pandemic.

The Finance Ministry estimates that budget revenues will grow by 7.5% in real terms in 2022 and that the public debt level will be about 51% of GDP.

Mexico's budget for 2022 includes increases in spending on social protection (+12.8%) and health care (+15.2%). The growth of physical investments of the state will be 12.8%, and the total growth of public expenditures in real terms will be 4.7%.

source: reuters.com