Mexico’s economic growth is likely to accelerate next year to approximately 3.0% from 2.4% in 2022, as inflation is reduced and oil output rallies.

This latest prediction is according to draft budget forecasts by the finance ministry seen by Reuters news agency, and confirmed by two sources with knowledge of the matter.

The finance ministry is scheduled to present the official budget for 2023 to lawmakers in Congress on Thursday.

Earlier in the week, Mexico’s president, Andrés Manuel López Obrador said the 2023 budget would not include any tax hikes.

The Mexican economy has performed better than many analysts had forecast for this year, fuelled by robust demand in the U.S., Mexico’s main trading partner. Indeed, Mexico’s exports and imports have reached all-time highs.

That said, consumer spending within the country has had to face a series of challenges as inflation hit more than 20-year highs, Reuters reports.

The draft budget forecasts revealed annual inflation declining to 3.2% by the end of next year, in line with the central bank’s forecast for Q4 2023. In addition, headline inflation will fall to 7.7% by December this year, from a high of 8.6% during the first two weeks of August.

Furthermore, next year the Peso is forecast to average at 20.6 per Dollar, after 20.4 in 2022, whilst oil output is likely to increase to 1.872 million barrels per day (bpd) on average from around 1.835 million bpd in 2022, the draft figures revealed.

Mexico is estimated to export around 784,000 bpd of oil on average in 2023, a reduction from 950,000 this year, the report goes on to add, as the government attempts to refine more of its crude at home to become more self-sufficient.

Mexico’s oil prices are forecast to average at $68.7 per barrel next year, after reaching $93.6 this year, the draft budget added. One of the sources told Reuters the crude price forecast was “conservative.”