LatinNews Daily - 27 May 2022

In brief: Moody’s revises up Mexico’s 2022 growth forecast

* International credit ratings agency Moody’s has revised up its 2022 GDP growth forecast for Mexico, from 1.1% to 1.8%. In a statement, Moody’s said this was due to “better-than-expected incoming data and the increase in service-sector activity”. Moody’s said it expected the recovery in the services sector to continue in the current quarter. However, the agency noted that inflation challenges were “denting household purchasing power”. Annual inflation stood at 7.58% in the first two weeks of May which, while a decrease on the 7.68% recorded at the end of April, is still far above the 3% +/-1 target range set by Mexico’s central bank Banxico. Moody’s concludes that, “sluggish domestic demand, weak investment prospects, and limited productivity growth will limit Mexico’s growth potential in the medium term.”

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