The Day at a Glance | November 22 2022

*The OECD maintained its 2023 growth estimates, but revised inflationary expectations; it called for central banks to not give in during the fight against inflation.

*COVID-19 cases in China continue increasing; offices and schools locked down in several cities.

*The FED can ease interest rate increases: Loretta Mester (Cleveland FED), Mary Daly (San Francisco FED).

*Retail sales in Mexico surprised to the downside during September (-0.2% m/m, 3.3% y/y).

*Buen Fin sales in 2022 could exceed the $195,000 million target.

*Covid outbreaks in China delayed the recovery in demand for oil until after the 2Q23.

*Chinese and US Secretary of Defense met to discuss tensions in Taiwan.

Economic environment

OECD outlook. The Organization for Economic Cooperation and Development (OECD) updated its growth and inflationary estimates for the global economy this morning. The organization didn´t make any considerable changes to its growth expectations – it forecasts growth will set at 3.1% in 2022 and 2.2% in 2023. In 2024, it expects a slight recovery (2.7%). In its report, the OECD assured it doesn’t expect to see a global recession next year, although it acknowledged that a significant economic slowdown will occur. The OECD expects growth to set at 0.5% in the United States and Europe in 2023, with the Eurozone being the most affected region due to the current energy crisis. For Mexico, upwards revisions were made because of the first 3 quarters of the year in and a firm recovery in the domestic market: 2.5% in 2022 and 1.8% in 2023.The OECD´s Chief Economist, Alvaro Santos Pereira, assured that the priority is to fight inflation at a global level in order to avoid an inflationary spiral from occurring as this would lead to continuous wage increases. He affirmed that doing little to contain inflation could end up in a negative scenario for the global economy, one in which central banks could tighten monetary conditions even more. Santos Pereira also highlighted that fiscal policies should be carried out in line with monetary policies and avoid new inflationary pressures. The OECD forecasts inflation above central bank targets in the United States (2.6%) and the Eurozone (3.3%) in 2023.