Mexico’s Economic Outlook

Last update: January 5th, 2024

 Table of Contents

Macroeconomic Fundamentals

Public Finances

Debt Management

State Owned Enterprises

C2 - Internal Natixis
 Gross Domestic Product and Employment

GDP Economic Activity Index (IGAE) Formal Employment 1/

QoQ % change, contribution Index Feb-20=100 MoM change, thousand jobs

4 Private cons. 115 180

Manufacturing Services
Public cons. Agricultural 160 Farm Extractive
Private invest. Industrial Construction Utilities
3 Public invest. Services 140 Trade Transport
Net exports 110 Total 109.4
Total
Total 1.1 120
2
100

1 105 80

60 38
0
40
100
-1 20

0
-2 95 -20
I II III IV I II III

Jun-22

Jun-23
Oct-21

Oct-22

Oct-23
Feb-22

Feb-23

Mar-23

Jul-23

Sep-23
Jan-23

May-23
Nov-22

Nov-23
2022 2023

Source: INEGI. Source: INEGI. 1/ Series

with seasonal adjustment.
Source: Mexican Institute of Social Security.

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 Private Consumption

Private Consumption Supermarket Sales Gasoline Spending and

Index Jan-20 = 100 Index Jan-20 = 100 Electricity Demand
Index Jan-20 = 100

150 115 150

Total
Electricity Demand
142.5 145 Gasoline Spending
140 Imported Goods Total Same Stores
140
National Goods 110.0
130 110 135
National Services
130
120
125
110 107.4 105 120
115.7
103.3 115
100
101.8 110
100.5
90 100 105 100.3
100
80
95
70 95 90
Sep-20

Sep-21

Sep-22

Sep-23
Mar-21

Mar-22

Mar-23

Aug-23
May-23
Feb-23
Nov-22

Nov-23
Jul-23

Sep-23
Mar-23
Jan-23

May-23
Nov-22

Nov-23
Source: INEGI. Source: ANTAD. Source: PEMEX and CFE.

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 Industrial Production and Exports

PMI Survey Industrial Production1/ Non-oil Exports

Index % change vs. Feb-20, contribution YoY % change, contribution
58 12 25
Mining Farm
Manufacturing
Utilities Extractive
Non-manufacturing 9.8
56 Construction 20 Automotive
9 Manufacturing Other manufactures
Total Exports
54 53.4 15
6

52 51.9 10

3
50 5
2.0

0
48 0

46 -3 -5

Jul-23

Sep-23
Mar-23
Jan-23

May-23
Nov-22

Nov-23
Aug-23
Aug-22
Apr-22

Apr-23
Jun-22

Jun-23
Dec-22

Oct-23
Oct-22
Feb-22

Feb-23
Jul-22

Jul-23
Mar-22

Mar-23
Nov-21

Nov-22

Nov-23

Note: Above 50 points is expansion. 1/ Series

with seasonal adjustment. Source: INEGI.
Source: IMEF. Source: INEGI.

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 Foreign Direct Investment

Top 10 Major FDI Recipients, 2Q-23 FDI Towards Mexico Gross Fixed Investment
Billion dollars Billion dollars, YTD1/ % of GDP, average 3Q-23

40
USA TUR

32.9
BRA 35
IND

CAN 30 IDN

IND 25 MEX 24.7

ITA 20 CHL

CHN ARG
15
ESP CRI
10
FRA COL
5
MEX 5.7 BRA
0
POL ZAF
I II III IV I II III IV I II III IV I II III
0 20 40 60 80 2020 2021 2022 2023 0 5 10 15 20 25 30 35

Source: OECD. 1/Preliminary figures. Source: OECD.

Source: Mexico’s Ministry of Economy.

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 Inflation and Foreign Reserves

General Inflation Exchange Rate Foreign Reserves, 2022

YoY % change, Nov-23 YTD % change, Dec-23 % of GDP
30
ZAF COL
Depreciation 26.6
MEX 15.3
BRA 25
BRA
MEX 4.3 HUN
20
URY
FRA
IDN
KOR 15
IND
11.4 11.1 10.7
USA CHL 9.7
10
MYS 7.2
CAN
ZAF
EA20 5
TUR
DEU ARG
0
0 2 4 6 -80 -60 -40 -20 0 20 40 MYS CHL MEX TUR IDN ARG

Source: OECD. Source: Bloomberg. Source: World Bank.

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 Medium and Long-term Inflation Expectations

Inflation Expectations for Next 12 Months Inflation Expectations for Next 5 Years
% %
7 7
Range Range
6 6
Median

5 5
Upper Limit 4.0 Upper Limit 3.7
4 4

3 3
Banxico target: 3.0%
Banxico target: 3.0%
2 2
Lower Limit Lower Limit

1 1

0 0

Jun-23

Aug-23
Apr-23
Dec-22

Dec-23
Oct-23
Feb-23
Jun-23

Aug-23
Dec-22

Dec-23
Apr-23

Oct-23
Feb-23

Source: Citibanamex Survey, as of December 19th, 2023. Source: Citibanamex Survey, as of December 19th, 2023.

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 Banking Sector

Domestic Funding to Private Sector Capital to Credit Risk Assets Mexico’s Financial Buffers
Real anual % change, contributions % Billion dollars
20
19 19.2
6 300
18
17 16.1 4.7 263.1
35.0 9.0
4 16 250
15
203.7
14 200
2 0 5 10 15 20 25 30 35 40 45 50
Months
Feb-20 - Oct-23 Aug-08 - Oct-12 150
0
Non-Performing Loans 100
-2 %
4.0
50
3.5
-4 Issuance 3.0
Development banking 2.5 0
Commercial banking 2.5

International

Total
treasury line

Stabilization
credit line
Total 2.2

Reserves

Flexible
-6 2.0

funds
US
Nov-.22

Nov-.23
Mar-.23
Mar-.22
Jan-.22

May-.22

Jan-.23
Jul-.22
Sep-.22

May-.23
Jul-.23
Sep-.23

1.5
0 5 10 15 20 25 30 35 40 45 50
Months
Feb-20 - Oct-23 Aug-08 - Oct-12

Source: Banco de México. Source: CNBV. Source: Banco de México, Mexico’s Ministry of Finance,
IMF, FED and US Department of the Treasury.

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 Mexico’s Risk Measures

Credit Default Swap US Treasury vs Emerging Bonds1/ Foreign Sovereign Holdings1/

Dec-19 vs. Dec-231/, basis points Index, Dec-19 = 100 Index, Dec-19 = 100
100 240 100 Total 310
BRA IND
Bono M
PER ZAF 300
Cetes
80 200 COL MEX 90 Udibonos (right) 290

280
60 160 80
80.8 270

260
120 70
40
250
102.5
80 60 240
20
230
9.5

40 50 220

Jun-23

Sep-23
Dec-22

Dec-23
Mar-23
0

Dec-22

Dec-23
Jun-23

Aug-23
Apr-23

Oct-23
Feb-23
CHN

MEX

CHL
PER

IDN

TUR
COL

BRA

1/ Last
data as of December 29th, 2023. 1/ UST
10-year bond. Last data as of December 29th, 2023. 1/ Figures
include all government values in effect at the
Source: Bloomberg. Source: Bloomberg. date of consultation.
Source: Banco de México.

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 Table of Contents

Macroeconomic Fundamentals

Public Finances

Debt Management

State Owned Enterprises

C2 - Internal Natixis
 Public Finances

Primary Balance Public Debt 1/ General Government Net Debt

% of GDP % of GDP % of GDP, Oct.-23
1.5 100
60 2023
wo/ BMOS 1/ wo/ BMOS 1/
w/ BMOS 2028

48.7
w/ BMOS

46.3
1.0 50 80

0.5 40

50.2
60
0.1
0.0 30

40

71.2
-0.5 20

60.7
52.6
49.7
46.6
42.8
20

36.4
10

27.9
-1.0

20.7
-1.2 0
-1.5 0

2024 */
2023 e/
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022

MEX
EME

LATAM

ZAF
PER

IDN
TUR

COL

BRA
2024 */
2023 e/
2017
2009
2010
2011
2012
2013
2014
2015
2016

2018
2019
2020
2021
2022

e/ Last data as of November. e/ Last data as of November. Source: IMF, Fiscal Monitor.
*/ Last estimate (CGPE 2024). */ Last estimate (CGPE 2024).
1/ BMOS: Banco de México Operating Surplus. 1/ BMOS: Banco de México Operating Surplus.

Source: Mexico’s Ministry of Finance. Source: Mexico’s Ministry of Finance.

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 Public Finances (November 2023)

REVENUES

• Public Sector’s revenues lower than the budget program by 113.6 billion pesos
(tax revenues excluding fuel excise tax -72.7 bn pesos | non-tax revenues + 86.2 bn pesos).

EXPENDITURE

• Programmable expenditure lower than the budget program by 166.4 billion pesos.
• Non-programmable expenditure was 82.9 billion pesos lower than the budget program.

DEBT

• Public debt has not exceeded the Congress ceiling, the Historical Balance of the Public Sector
Borrowing Requirements (HBPSBR) amounted to 14,572.1 billion pesos and net public sector debt stood
at 14,640.3 billion pesos.

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 Table of Contents

Macroeconomic Fundamentals

Public Finances

Debt Management

State Owned Enterprises

C2 - Internal Natixis
 Federal Government Debt Breakdown

Federal Government Gross Debt Breakdown, 3Q23 Federal Government Debt Statistics
2018 vs 2023, % of Total
100
External Debt
16.4
22.7
80 6.5% 20.1
100%
of GDP years at a fixed rate
60 as of 3Q23 average maturity

40 83.6
77.3

Domestic Debt
20
33.4% 7.8
76.3%
0 of GDP years at a fixed rate
2018 2023 as of 3Q23 average maturity
Domestic External

Source: Mexico’s Ministry of Finance.

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 Sustainable Sovereign Bond
The Mexican Government is committed to broaden its investor base through the issuance of sustainable finance
instruments, aligned with the Sustainable Development Goals (SDGs).

In Sep-201/, Mexico became the first country in the world to issue a sustainable sovereign
bond2/ that were linked to the SDGs, for an amount of EUR 750 million. As part of Mexico's
1 Sustainable Financing Strategy, the Treasury issued a new benchmark sustainable bond
denominated in dollars maturing in 2053. This is the ninth sustainable bond issued in
international financial markets3/.

Mexico’s innovative instruments and debt management have been recognized

internationally:
1
▶ Moody’s assigned an SQS1 sustainability quality score (excellent) to the
Government of Mexico’s SDG Sovereign Bond Framework4/.
▶ In April 2023, Mexico received two international awards for its public debt
management and its vision of sustainable development. A total of 22 has been
awarded in the last five years5/.
▶ In July 2023, Mexico carried out the initial issuance of the BonoS, a sustainable bond
in local currency. This issuance consolidates Mexico as the country with the largest
ESG corporate bond market in Latin America6/.
1/ Announcement No. 071.
2/ In November 2021 the SHCP released the report: Mexico’s SDG Bond: Allocation and Impact Report 2021.
3/ Announcement No. 27.
4/ Moody’s Investors Service.
5/ Announcement No. 24.
6/ Announcement No. 50.

C2 - Internal Natixis
Source: Mexico’s Ministry of Finance, 2023. 16
 Table of Contents

Macroeconomic Fundamentals

Public Finances

Debt Management

State Owned Enterprises

C2 - Internal Natixis
 State-owned Enterprises

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results.aspx

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presentation.aspx
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