Mexico's economy to be impacted by U.S. recession in 2023, says BofA-Xinhua

Mexico's economy to be impacted by U.S. recession in 2023, says BofA

Source: Xinhua| 2023-01-21 11:32:15|Editor:

MEXICO CITY, Jan. 20 (Xinhua) -- Mexico's economy may follow its biggest trading partner, the United States, into recession this year, with the former's trade and remittances impacted, the Bank of America (BofA) said Friday.

Mexico's gross domestic product (GDP) is projected to grow by 0.3 percent in 2023, an upgrade from the 0.5 percent contraction projected earlier, the bank forecasts.

BofA also expects the U.S. economy to register its first contraction in the second quarter of the year.

On the economic front, the main transmission channels of the slowdown in the United States could be remittances and trade, the bank added.

As the two countries' manufacturing cycles are highly interconnected, Mexican imports of intermediate goods are slowing down, a trend that will soon impact Mexican exports, said the bank.

Mexico's economy, the second largest in Latin America after Brazil, grew by 3.1 percent in 2022, according to BofA estimates.

Mexico's economy grew 4.8 percent in 2021, after plunging 8.2 percent the previous year due to the COVID-19 pandemic, said the National Institute of Statistics and Geography.