The Day at a Glance | September 19 2023

*The OECD improved its economic outlook for 2023; it raised Mexico´s estimated economic growth for 2023 to 3.3%.

*INEGI published its Timely Indicator of Economic Activity (IOAE), which forecasts that the Global Indicator of Economic Activity (IGAE) will have logged  3.4% annual growth in August.

*US Treasury Secretary Janet Yellen says that the US economy can achieve a “soft landing” and withstand short-term risks such as the automotive manufacturing strike, a potential government shutdown, and China’s economic issues.

*Crude oil prices (WTI) rose to their highest level in over a year due to concerns about supply caused by the extension of cuts by Russia and Saudi Arabia, as well as a decrease in US oil production.

Economic environment

The OECD improved its economic outlook for this year; it raised its forecasted economic growth for Mexico in 2023 to 3.3%. According to the OECD, after a stronger than expected start in 2023, the global economy is expected to moderate for the remainder of the year. The global growth expectation for 2023 has been revised up to 3.0% (2.7% prev.), while for 2024, it´s expected that the economy will slow down with a growth rate of 2.7% (2.9% prev.). This is mainly due to economic performance in the United States and China. On one hand, the US economy has been stronger than initially expected in 2023, with a forecasted growth rate of 2.2% for this year, slowing down to 1.3% in 2024. On the other hand, the weakening of China´s economy could pose a challenge to global growth in 2024, as it´s expected to drop from an estimated growth rate of 5.1% this year to 4.6% in 2024, due to weak global demand and pressures in the real-estate sector. Regarding inflation, the OECD highlighted that although it´s decreasing, it remains high. Therefore, the organization suggests that central banks should maintain a restrictive monetary policy stance until clear signals emerge that inflationary pressures have been mitigated.