The business climate in Mexico recorded a notable improvement for this third quarter of 2023 and, together with Brazil, brought the rating at the Latin American level to its best level in the last two years and the second best in almost six years, according to The indicator published this Thursday by the Brazilian center for economic studies, Getúlio Vargas Foundation (FGV).

Latin America’s Economic Climate Index (ICE), compiled by the FGV from surveys of 119 specialists from 15 countries, jumped by more than 30 units, from 65.8 points in the second quarter to 99.6 points in third.

This is its best level since the second quarter of 2021 (101.4 points) and the second best since the first quarter of 2018 (102 points).

According to the FGV, this sharp increase is due to the improvement in the valuation of Brazil and Mexico, the two largest economies in the region.

While Brazil’s index rose from 58.8 points in the second quarter to 121.4 points in the third, the country’s highest in 11 years, Mexico’s rose from 85.7 to 118.7 points.

“The downward trajectory of the inflation rate and the approval of the new fiscal framework and tax reform, as well as the upward revisions of this year’s GDP projections, are some of the factors that explain the better assessment of Brazil”, according to FGV.

The entity attributed the increase in Mexico’s rating to the fall in inflation, the appreciation of its currency against the dollar and the shift in direct investment flows from the United States and China to the Mexico due to the trend towards offshoring.

Read also: Nearshoring could bring foreign investment in Mexico to $60 billion

All countries analyzed recorded an improvement in their business climate, with the exception of Uruguay which recorded a slight decline from 119.4 points to 114.9 points.

Paraguay remains the country with the best index in the region, with 172.7 points, followed by Brazil (121.4), Mexico (118.7) and Uruguay (114.9).

Next come Peru (85.8 points), Chile (76.6), Colombia (61.4), Ecuador (49.9), Bolivia (47.7) and Argentina (30. 3).

According to the study, the improvement in indicators reflects the upward revision of GDP growth projections for countries in the region, with the exception of Peru, Uruguay, Chile and Argentina.

Economic growth forecasts for 2023 for Latin America in general were raised from 1.1% in the second quarter to 1.7% in the third.

The country that will experience the strongest growth this year, according to the new projections, is Paraguay, with an expansion of 4.6%, followed by Bolivia (3.0%), Mexico (2.3%), Ecuador (2.2%), Brazil (2.2%). ), Peru (1.9%), Colombia (1.5%) and Uruguay (1.3%).

A drop of 0.5% is forecast for Chile and 1.3% for Argentina.

With information from the EFE

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