The Day at a Glance | October 20 2022

*Mexico´s economy grew 3.3% annual in September (0% monthly).

*The Yen depreciated and set above 150 per dollar for the first time since 1990; BoJ carries out massive bond purchases to contain sovereign debt yields.

*Talks of substituting Prime Minister Truss have started among the British Conservative Party.

*China assesses reducing 10 days of quarantine for travelers from abroad.

*Putin declares martial law in annexed territories in Southeastern Ukraine; he is committed to defend them.

Economic environment

Economic activity in Mexico. According to the Timely Indicator of Economic Activity (IOAE for its initials in Spanish) made public by the INEGI, a 3.3% annual rate of progress is forecasted for September´s GDP figure; 0% monthly. This implies that monthly growth has become stagnant, although compared to last year, activity has recovered in a robust way. By sector, monthly growth in the industrial sector is expected to be null (0%) while a slight (-) 0.1% contraction is forecasted for services and trade. Nevertheless, comparisons made with the same month of last year are favorable as the industrial sector logged a 4.1% expansion and services did the same in 3.1%. The indicator doesn’t include any estimates for the primary sector. The figures confirm that Mexico´s economy continues recovering this year – for it to gradually regain its pre-pandemic levels; although it hasn’t been able to do so yet. The annual figures reflect a low base comparison as Mexico´s economy became stagnant in light of persistent COVID-19 waves around this time last year. 2022 kicked off with a faster recovery in economic activity due to strong demand in the local market. However, activity has lost momentum in the second half of the year, and greater weakness is expected to be seen in the following months due to high inflation and higher interest rates, which will gradually halt growth in Mexico (and the world) towards 2023.