Mexico Expects Economic Growth of 2.5% to 3.5% in 2024

Introduction

Mexico’s finance ministry has released a draft budget document that predicts the country’s economy will expand next year by approximately 2.5% to 3.5%, similar to this year’s expected growth.

Economic Growth Forecast

• Latin America’s second biggest economy, after Brazil, is expected to grow by 3% in 2023.

Inflation Rate Projection

• The 2024 draft budget forecasts headline inflation to slow down to 3.8% by the end of next year, compared to a 4.5% rate for this year.

Government Budget Approval Process

• The official 2024 budget will now be debated by lawmakers in Congress, where the ruling party and its allies hold a majority in both chambers.

Exchange Rate and Crude Oil Price

• The draft budget estimates the exchange rate for the Mexican peso to be 17.6 pesos per U.S. dollar by the end of 2024.
• The budget assumes an average crude oil export price of $56.7 per barrel next year.

Pemex Budget Cut

• Pemex’s overall budget will be cut by 36% compared to 2023 funding levels.

Central Bank’s Inflation and Growth Predictions

• Mexico’s central bank, Banxico, predicts headline inflation to reach 4.6% in the fourth quarter of this year and estimates economic growth between 1.3% and 2.9% for next year.

Conclusion

The Mexican government’s draft budget for 2024 expects steady economic growth and a decrease in inflation. The budget will now undergo review and debate in Congress before final approval.

Sources

• Reuters Report

Author

Reporting by Ana Isabel Martinez; Additional reporting by Carolina Pulice and Sarah Morland; Editing by Stephen Eisenhammer, Chizu Nomiyama, and Leslie Adler

Trust Principles

Our Standards: The Thomson Reuters Trust Principles

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