The International Monetary Fund (IMF) on Friday forecast Mexico's economy will grow 2.1% in 2022 and 1.2% in 2023, saying "economic growth is expected to slow in the near term reflecting weaker U.S. growth and tighter global financial conditions," Reuters reported. The IMF said in a statement that Mexico is well-placed to navigate a turbulent global environment due to "very strong" macroeconomic policies and policy frameworks. The fund also said it welcomed the "proactive approach" from Mexico's central bank, known as Banxico, in tackling inflation with interest rate hikes.
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Mexico's economic activity indicators in the third quarter point to economic growth in line with forecasts of 2.4% annual growth in 2022, the country's finance ministry said on Friday, Reuters reported. "The Mexican economy continues to grow with solid macroeconomic balances despite a challenging international environment," the ministry said in a statement. The ministry said dynamic economic activity and a strong labor market led to "positive results" in tax collection, putting it on track to meet year-end estimates.
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Mexican annual inflation slowed more than expected in the first half of October but remained far above the central bank's target rate, data from national statistics agency INEGI showed on Monday, Reuters reported. Headline inflation in Latin America's second-largest economy inched down to 8.53% from 8.64% in the second half of September. "With the measures we're taking we are seeing a slowdown in inflation," President Andres Manuel Lopez Obrador told a news conference, pointing to a pact with retailers to contain prices of key food staples.
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Mexico's economy likely stagnated in September after two months of expansion, according to a preliminary estimate provided by the national statistics agency on Thursday, Reuters reported. The Economic Activity Indicator (IOAE) did not register any variation compared to the previous month. For Mexico's secondary sector, which includes manufacturing activities, no monthly variation is expected in September either, while for the tertiary sector, covering services, a 0.1% contraction is anticipated, according to the report.
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Mexico's biggest non-bank lenders may need to become licensed banks, analysts said, as they maneuver through growing market turmoil to avoid the fate of three big peers who defaulted in the past year, Reuters reported. "Any fintech with serious, long-term ambitions will likely have to find a way to become a bank," says Mike Packer, an investor at QED, a venture capital fund which has backed several lending fintechs. During the pandemic, the non-bank institutions grew to represent 20% of Mexico's private credit market.
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Mexico is considering changes to its stock market law to entice family-controlled companies to go public in a bid to end a years-long drought in public listings and help attract more investors to Latin America’s second largest economy, Bloomberg News reported. The reforms being reviewed by regulators and government officials would both allow dual-class share listings and make it easier to block hostile takeovers, according to people with knowledge of the discussions and a draft proposal seen by Bloomberg News.
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Late one Saturday night in April 2021, a Mexico City-based payroll lender proved Alexis Panton right, Bloomberg News reported. A year into the pandemic, Panton, who was then a debt strategist in New York for Stifel, Nicolaus & Co., had been snarkily warning that the math underlying Crédito Real SAB de CV didn’t add up. Hedge funds and big banks had ignored him, instead backing the company, a rising star of Mexico’s shadow banking industry that borrowed cash from big-time foreign investors and cut smaller loans to low-income people and businesses.
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Mexican officials on Monday announced the details of a new deal with companies to halt rising food prices, doubling down on a collaborative effort with the private sector as inflation hovers at a 22-year high, Reuters reported. More than a dozen foodmakers and retailers are part of the plan, which will waive certain regulatory requirements, Mexican Finance Minister Rogelio Ramirez de la O said.
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International bondholders are considering taking legal action in Mexico to recoup losses from troubled non-bank lender Credito Real, four sources have told Reuters, after bank creditors secured a settlement earlier this month, Reuters reported. Credito Real bonds have lost about 99% of their value since the company defaulted on a 170 million Swiss franc ($175.98 million) bond in February, kicking off a commercial liquidation process criticized by shareholders for lacking transparency.
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