Insight

Exclusive-Mexico budget sees stronger growth, lower inflation in 2023 -draft

By Ana Isabel Martinez, Anthony Esposito and Dave Graham

MEXICO CITY (Reuters) – Mexican financial progress ought to speed up in 2023 to round 3.0% from some 2.4% this 12 months as inflation cools markedly and oil output picks up, based on finance ministry draft funds forecasts seen by Reuters on Wednesday.

The finance ministry didn’t instantly reply to a request for remark concerning the forecasts, which had been in a draft doc and confirmed by two sources accustomed to the matter.

The draft was not dated, however one of many individuals stated the figures in it had been updated.

The ministry is because of current the official 2023 funds to lawmakers in Congress late on Thursday.

President Andes Manuel Lopez Obrador stated on Tuesday the funds wouldn’t include any tax will increase.

Mexico’s financial system has carried out higher than some analysts had beforehand anticipated in 2022, powered by robust demand for its items in america, the nation’s prime commerce associate. Mexican exports and imports have climbed to file ranges.

Nonetheless, client spending has confronted challenges with inflation hitting its highest fee in over twenty years.

The draft forecasts confirmed annual inflation easing to three.2% by the tip of 2023, consistent with the Financial institution of Mexico’s prediction for the ultimate quarter of subsequent 12 months. It additionally noticed headline inflation cooling to 7.7% by December of this 12 months from greater than 8.6% through the first half of August.

In 2023, the peso foreign money was seen averaging 20.6 per greenback, after 20.4 this 12 months, whereas oil output was seen advancing to a mean of 1.872 million barrels per day (bpd) from some 1.835 million bpd in 2022, the figures confirmed.

In response to the draft forecasts, Mexico was seen exporting a mean of 784,000 bpd of oil in 2023, down from some 950,000 bpd this 12 months, as the federal government seeks to refine extra of its crude domestically to make the nation extra self-sufficient.

These targets will rely significantly on the flexibility of state oil agency Petroleos Mexicanos (Pemex) to ramp up refining.

In the meantime, Mexico’s oil costs had been seen averaging $68.7 per barrel in 2023 after hitting $93.6 this 12 months, the draft stated.

The crude worth forecast was “conservative,” based on one of many individuals accustomed to the matter, who spoke on situation of anonymity.

(Reporting by Ana Isabel Martinez, Anthony Esposito and Dave Graham in Mexico Metropolis; Enhancing by Matthew Lewis)



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