The Organisation for Economic Co-operation and Development (OECD) has upwardly revised its economic growth forecasts for Mexico for 2023 and 2024.

As part of an interim Economic Outlook report published on Tuesday, the OECD predicts Mexican GDP will grow by 3.3% in 2023 and 2.5% in 2024.

The previous forecast is 0.7 percentage points higher than the OECD’s forecast unveiled in June, whilst the latter is 0.4 percentage points higher.

One of the reasons why the forecasts for Mexico have been upgraded is the OECD’s better-than-expected growth in the US this year, and next year, Mexico News Daily reports.

The organisation hiked its growth forecasts for the US economy to 2.2% for 2023 and 1.3% for 2024, respective improvements of 0.6 and 0.3 percentage points.

Other factors benefitting Mexico’s economy are the gradual fall in inflation this year, the strength of the country’s labour market, the federal government’s welfare spending and infrastructure projects, all-time high remittance inflows and the mounting nearshoring phenomenon.

Furthermore, GDP rose 3.7% in annual terms in Q1 this year in Mexico and 3.6% in Q2, according to a recent Bank of Mexico report. Whereas preliminary data published on Tuesday by the national statistics agency INEGI revealed the economy grew 3.4% in August this year compared to August 2022.

In addition, the OECD also upwardly revised its global economic forecast for this year, increasing its outlook to 3% from 2.7% in June. Global growth of 2.7% is forecast in 2024, a fall of 0.2 percentage points compared to the prior prediction.

“Global GDP growth is projected to remain sub-par in 2023 and 2024, at 3% and 2.7% respectively, held back by the macroeconomic policy tightening needed to rein in inflation,” the OECD stated.