By Francisco Peyret
During 2022, countries similar to Mexico registered economic growth, unlike European countries, whose economies fell into recession.
The forecast for 2023, however, is not very encouraging. As we start the year, we will continue to monitor growth expectations, inflation, and the monetary policies that will affect interest rates and economic growth. We are waiting to see what might happen with the most powerful economies in the world, China and the United States. They have been experiencing periods of tension for a few years now, which obviously affect global economic performance. Growth and inflation are uncertain for North America, which is dependent on food and energy prices that are expected to remain high. The significant number of job vacancies in the US supports employment growth. This directly affects private consumption, and may cause the economy to fall less than is currently forecast for 2023.
According to Bank of Mexico estimates, the country does not seem to be doing as badly as some. GDP grew by 3.0% in 2022, and is forecast to slow to 0.9% in 2023. This is not considered high drama. So far, Mexico’s economy has been a surprise, with its strong peso and good performance in public finance. Thanks to government actions, such as not injecting economic stimuli during the pandemic, the economic recovery is proving healthy. In 2023, Mexico is expected to continue its good performance in exports, as during 2022. President Andrés Manuel López Obrador has promised three mega public investment projects in 2023: 1) the Mayan Train, with 1,554 kilometers of tracks to be completed by July 2023. Forty-two engines, along with 219 wagons, are being manufactured in Ciudad Sahagún, Hidalgo; 2) The Mexico-Toluca Train, which will connect the metropolitan area of the Toluca Valley with the west of Mexico City, improving its connectivity. The plan includes six stations—two will be terminals, and the other four intermediate stations; and 3) the Tulum International Airport, with a 4-million-passenger capacity annually. The airport and the Mayan Train are scheduled to be inaugurated together by the end of 2023.
The outlook for 2023 in terms of private investment is encouraging in some sectors, particularly for key industries that remained dynamic during 2022. Specifically, these are sectors associated with climate change, the environment, and health. The best investments will go to industries and projects with sustainable technologies.
Global geopolitical factors, the scarcity of supplies, and the increase in food and fuel prices have become a watershed for development. Industry leaders are looking to invest in solutions (research and innovation in terms of clean energy and other sustainable energies) for a population that is daily more aware of these issues. Significant opportunities for investing in Mexico are in areas related to software, clean energy, biotechnology, insurance, health, and logistics (commerce).
Following the resurgence of economic activity in the post-pandemic era, tourism has become one of Mexico’s most important industries. The sector has reinvented itself to remain competitive. According to data from the National Institute of Statistics and Geography (INEGI), international tourism grew 13.9% in October 2022, compared to the same month in 2021. Likewise, local tourism has become a viable option, and the reactivation of this sector in Mexico will most likely continue.
Technology and consumer preferences will set the tone for growth and trends in the tourism sector in 2023. Traveler preferences will focus on destinations that offer relaxation, health, meditation, and nature experiences. These preferences will benefit world heritage cities, magical towns, and mountainous or rural areas because they are considered safe and highly reliable destinations. Tourism entrepreneurs must take these preferences into account when planning trips to national destinations, strengthening and building consumer loyalty, and the industry itself. According to the Federal Government Office of Tourism, tourism should focus on the trends that mark the new era of post-pandemic tourism, including ecotourism, luxury tourism, wellness tourism, nomadic travelers, and gastronomic tourism.
According to “Forbes” magazine, international tourism figures reflect a recovery since the Covid-19 pandemic. Mexico welcomed almost 18 million international tourists in the first half of 2022. Virginia Messina, vice president of the Council of World Travel and Tourism (WTTC), said at a recent conference that the recovery is progressing faster than expected. WTTC estimates that Mexico will be back at 100% of tourism numbers in 2023.
Lack of security remains an issue for Mexico in 2023. Nonetheless, foreigners are moving to many areas and cities in the country. According to “Expat Insider,” in 2022 Mexico City (CDMX) ranked third among the 10 best cities in which to live and work. CDMX was surpassed only by Valencia, Spain, and Dubai, UAE. This classification considers factors such as quality of life, ease of settling in, work, personal finances, language, and paperwork.
