Citibanamex raises its forecast for 2024

Citibanamex once again raised its economic growth projection for this year, from 1.4 to 1.5 percent.

The adjustment occurred after the National Institute of Statistics and Geography (Inegi) announced that the economy accelerated its growth to 1 percent in the third quarter.

With today’s positive surprise, we now estimate that accumulated growth in all of 2024 will be 1.5 percentindicated the Citibanamex analysis area.

The financial institution indicated that the national economy slowed significantly between the last quarter of last year and the second quarter of 2024, but it rebounded more than expected in the third.

He explained that the surprise increase is related to a significant recovery in the primary sector and the fact that consumption and investment performed better than expected. possibly in part due to lagged effects of the increase in public spending in the first semester.

Signs of resilience

Monex analysts specified that the results of the third quarter show signs of resilience of the Mexican economyafter the weakness observed at the end of 2023 deepened and was expected to affect the figures for the second quarter of 2024.

We do not rule out a possible downward revision in the estimate of growth in secondary and tertiary activities due to less momentum in manufacturing, sharp falls in construction and sluggish consumption (retail sales). For now, our GDP growth estimate for 2024 stands at 1.5 percent.

Ve por Más specialists specified that the GDP exhibited its highest quarterly growth since the end of 2021. Although the figures revealed today were favorably surprising, it is difficult for activity to maintain the pace at the end of the year. For this reason, we decided to maintain our specific GDP growth forecast for 2024 at 1.3 percent. Private consumption will still find support in the strength of the labor market and growth in wageshighlighted.

Overall, Mexico’s economy posted better-than-expected growth in the third quarter, driven primarily by the primary sectorIntercam economists considered.

For their part, Banorte analysts warned that “after the acceleration, the challenges in the following quarters will gain relevance… The headwinds for the economy are becoming more present, both external and internal. Even climatological factors could have an important influence.”