Mexico’s economy grew 3.1% in 2022, the national statistics agency INEGI reported Friday.
Final revised data showed that GDP growth was just above the 3% preliminary figure reported at the end of January.
The percentage is lower than the 5% growth President Lopez Obrador predicted for 2022 back in February 2022 but higher than many experts forecast at the time: his own economy minister, Tatiana Clouthier, predicted growth of only 2.6%, while Banxico predicted much lower at 2.2% growth.
The International Monetary Fund’s prediction in February hit closer to the mark with a predicted growth for 2022 of 2.8%.
The 3% growth occurred against an economic backdrop of persistently high inflation and record-high interest rates as the Bank of México tightened monetary policy in an attempt to put downward pressure on soaring prices.
The secondary, i.e., manufacturing, sector recorded annual growth of 3.3% in 2022 while the tertiary, or service, sector expanded 2.8%. The primary sector, which includes agriculture, fishing and forestry activities, grew 2.7% compared to 2021.
Mexico’s GDP in 2022 just missed recuperating to 2018 levels. Hover over the data points to see exact figures.
INEGI also reported that GDP expanded 0.5% in the last quarter of 2022 compared to the previous quarter and 3.7% compared to Q4 of 2021.
Comparing Q4 to Q3 of 2021, the primary sector grew 2% in the three-month period while the secondary and tertiary sectors expanded 0.5% and 0.1%, respectively.
Mexico’s growth last year took some economic observers by surprise: at the end of 2022, the British magazine The Economist ranked Mexico’s economy sixth out of 34 countries on a list of “2022’s Unlikely Winners” — which highlighted world economies that performed far better than expected in that year.
Gabriela Siller, director of economic analysis at Banco Base, said on Twitter Friday that revenue from exports contributed significantly to Mexico’s economic growth last year.
“GDP grew 3.1% in Mexico in 2022, driven mainly by the external sector. The secondary sector, in which manufacturing exports are taken into account, was the sector with the highest annual growth,” she wrote.
After INEGI’s preliminary growth data was released, Siller said that nearshoring — the relocation of companies to Mexico to be close to the United States market — benefited the economy in 2022, but growth could have been higher if the phenomenon was taken advantage of more fully.
A breakdown on Mexico’s GDP since 2018, quarter by quarter.
Alfredo Coutiño, director for Latin America at Moody’s Analytics, said on Twitter Friday that the quarter-over-quarter growth figures for the secondary and tertiary sectors were indicative of an economic slowdown at the end of 2022.
The Ministry of Finance and Public Credit is forecasting 3% growth in 2023, but the International Monetary Fund is predicting GDP will expand by just 1.7%. The World Bank is even more pessimistic, anticipating growth of just 0.9% in Mexico in 2023.
“Domestic demand for services should continue to gradually recover in 2023, but a sharply weaker U.S. outlook is likely to curtail growth of exports and inward remittances,” the World Bank said in its January Global Economic Prospects report.
“… Consumption and export growth are expected to pick up in 2024, as inflation subsides and external conditions improve,” the bank added, predicting Mexico’s economy will grow 2.3% next year.
Mexico News Daily