Real GDP growth is projected to reach 2.6% in 2023 and edge down to 2.1% in 2024. Consumption will be supported by the improvement in the labour market but will be dampened by high inflation. Investment will benefit from the easing of bottlenecks in global value chains and the relocation of manufacturing activity to Mexico. Export growth will be held back by the United States economic slowdown. Inflation will decline to 5.9% in 2023 and 3.7% in 2024.
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Mexico is recovering from a pandemic that had deep economic and social impacts. Informal workers, women and youth were particularly hit, exacerbating long-standing social challenges. Mexico’s solid macroeconomic policy framework safeguarded macroeconomic stability. But medium term growth prospects have weakened and growth over the past two decades has been low. Poverty rates and regional inequalities remain high. Informality, ﬁnancial exclusion or corruption have hindered productivity growth. Low female participation rates and weak investment since 2015 have also impacted medium-term growth prospects. Maintaining and strengthening Mexico’s solid macroeconomic policy framework is key for stability.