The Day at a Glance | Aug 26 2022

The Top

*Mexico`s trade balance once again logged a deficit in July (5,958 USD); exports decreased (-) 0.26% monthly, imports (-) 3.13%.

*Members of Banxico are concerned about the possibility of mid and long-term inflationary expectations becoming unanchored, the meeting minutes revealed.

*Inflation (PCE) in the United States became more moderate (6.3% annual) in July; personal income and spending increased less than expected.

*Putin signed a decree to increase Russia`s army to 1.15 million troops.

Economic environment

Mexico`s trade balance deficit. INEGI figures logged a trade balance deficit for a fourth consecutive month. During July, the deficit was worth 5,958 million dollars, and for the first 7 months of the year, the deficit amounted to 18,904 million dollars, a historically high figure. Exports during the month logged a slight (-) 0.26% contraction after a 6.05% monthly decrease in oil exports (as global crude oil prices fall) and a 0.24% monthly increase in non-oil exports. At an annual rate, exports increased at an 18% rate. Manufacturing exports (11.8% annual) – especially automotive (12.5%) – have logged a more moderate increase after a strong rebound in the beginning of 2022. Imports, however, also receded (-3.13% monthly), due to a decrease in oil imports (-6.91%) and non-oil imports (-2.44%). By category, consumer (-3.34%) and intermediate goods (-3.39%) decreased, while capital goods practically remained unchanged (-0.02%). At an annual rate, imports logged a faster pace of expansion than exports (16.7%), which explains the trade balance deficit as the domestic market has had a firm recovery in the first half of the year.