The Day at a Glance | November 18 2022

The Top

*INEGI estimates a 5% annual growth of the Mexican economy during October (0.1% monthly).

*People’s Bank of China provided liquidity after massive sales on fixed income markets.

*Commissions in the Mexican Congress will discuss the electoral reform proposed by the President next week.

*European banks will pay €296 billion to the ECB due to loans from the TLTRO program.

*IMF confirmed that Mexico accomplishes the requisites to keep open the Flexible Credit Line.

*Russia attacks East Ukraine; aims energy plants.

*Sweden confirms that Nord Stream pipeline leaks were sabotage.

Economic environment

Mexican Growth. This morning, INEGI published the most recent estimates for Mexican economic growth during October, through its Leading Economic Activity Indicator. The projections point to a 5% annual expansion for the last twelve months and a 0.1% month-to-month advance. The yearly strong expansion responds to the low comparative bases since in October 2021 the economy was stagnant and held back by persistent restrictions to control the COVID-19 waves. However, given the recovery in 2022, particularly in the domestic market, the growth at annual rate during October registered an uptrend (5% vs 4.8% Sep.). Anyway, the monthly change has been marginal with a 0.1% advance that indicates a loss of momentum in the economic recovery at the beginning of the Q4 ’22. Both industry and services are projected to grow 0.1% in October, expecting a stagnation. Even so, in its annual comparison, the recovery has been firm in both sectors, with an estimated expansion of 3.5% in industry and 5.6% in services. This would bring the Mexican economy close to its pre-pandemic levels of activity. The recovery in Mexico has been sluggish due to the lack of fiscal stimuli after the 2020 crisis and a slower vaccination process than in advanced economies. Today’s data show that, finally, the recovery has crystallized in 2022.