Real GDP growth is projected to slow from 2.5% this year to 1.6% in 2023, but to edge up to 2.1% in 2024. Consumption will be supported by the gradual improvement in the labour market but dampened by high inflation. Exports will continue to benefit from high integration in global value chains, but their dynamism will be mitigated by the slowdown in the United States. Inflation will edge down to 5.7% in 2023 and 3.3% 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.
The pandemic highlighted how recent increases in poverty, inequalities and gender gaps, exacerbate a long-standing challenge to increase inclusiveness. Raising living standards will require boosting productivity growth by improving the business climate, including through fighting corruption and enhancing the skills across the population.
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