MEXICO CITY (Reuters) -Mexico’s economy should grow 3.5% over 2022, 2023 and 2024, President Andres Manuel Lopez Obrador said on Sunday in a speech to a massive crowd gathered in the country’s capital to mark his fourth year in office.
An economic slowdown, largely in the industrial sector, weighed on to Mexico’s Gross Domestic Product (GDP) growth, keeping it slightly below estimates in the third quarter this year.
Analysts have predicted GDP will grow by 2.7% this year, while the International Monetary Fund expects growth to slow to 1.2% next year.
“The economy will increase by 3.5% this year and, I estimate, by that same percentage at least for 2023 and 2024,” he said.
Lopez Obrador has recently said we would like to see the central bank balance fighting inflation with the need to protect economic growth.
(Reporting by Diego Ore Oviedo; Editing by Daniel Wallis and David Gregorio)
Breaking Free From Debt: A Money Management Guide to Financial Recovery
If you’re here, we’ll give ourselves the liberty to assume that you are knee-deep in debt. Debt can be overwhelming and debilitating, but it is possible to break free from it and regain control of your finances.
A complete financial recovery is only possible if we get to the root of what made you fall into debt in the first place. The only way you can break free from debt is by changing the pattern of your financial behaviors.
Here is a money management guide to assist you as you transition to financial stability.
Step 1: Analyze your present financial state
The first step in breaking free from debt is to analyze your current financial state. This includes understanding how much debt you have, what types of debt they are, and the interest rates associated with them. Once you have a clear understanding of your debt, you can start to create a plan to pay it off.
Step 2: Prioritize your debts
Once you know how much debt you have, you must first prioritize which debts to pay off. Start by paying off high-interest debt, such as credit card debt, as it will cost you more in the long run. Next, focus on any indebtedness with late fees or penalties, as they will also cost you more money.
Step 3: Create a budget
Creating a budget is essential to breaking free from debt. Making a budget will enable you to see where you may make savings and where your funds are being spent. It will also give you a clear picture of how much money you have to put toward your monthly debt.
Step 4: Find strategies to boost your earnings.
In addition to cutting back on expenses, looking for ways to boost your income will be a game changer. You may do this by taking a part-time type of work, selling things you no longer require or figuring out how to use your abilities or hobbies to earn some cash.
Step 5: Stay motivated
Breaking free from debt takes time and effort, and it can be easy to get discouraged. To stay motivated, set small goals and celebrate when you reach them. Remember, every dollar you pay toward your debt is one step closer to financial freedom.
Step 6: Seek professional advice
If your debt is overwhelming and you need help to make progress on your own, seek professional advice. You can develop a personalized strategy to pay off current debts and get back on your feet with the aid of a financial planner or credit counselor. You may ask them, “What is a consumer proposal?” or “What government schemes can pull me out of debt?”
Canadian Government Schemes For Debt
In Canada, there are several government programs and initiatives that aim to help individuals and families manage and reduce their debt. Some examples include:
- The Credit Counseling Service: This service is provided by non-profit organizations and helps individuals with budgeting and debt management. They provide free counseling, advice, and education on how to manage debt and improve credit scores.
- The Bankruptcy and Insolvency Act: This federal law provides a legal process for individuals and businesses to resolve their debts if they are unable to pay them. It includes provisions for both bankruptcy and consumer proposals.
- The Financial Consumer Agency of Canada (FCAC): The FCAC is an autonomous governmental organization that offers advice and assistance to assist Canadians in making wise monetary choices. They offer guidance on how to control debt, raise credit ratings, and stay away from financial con artists.
- The Consolidated Credit Counseling Services of Canada: This is a nationwide, non-profit credit counseling organization that provides credit counseling, debt consolidation, and debt management services to Canadians.
- National Student Loans Service Centre: This service provides information and assistance to individuals with student loans and helps them manage their debt.
It’s important to note that these government schemes are not a one-size-fits-all solution.
What Not to Do When You’re in Financial Debt
Avoiding specific actions when in debt is important because it can help you get out of debt more quickly and with less damage to your financial well-being
- Don’t ignore the problem: Ignoring debt will only make it worse.
- Don’t use credit cards to pay off debt: This will only add to your debt and make it harder to pay off.
- Don’t borrow more money: Taking on more debt to pay off existing debt is not a sustainable solution.
- Don’t avoid communication with creditors: Ignoring calls and letters from creditors will only worsen the situation.
- Don’t miss payments: Failing will lower your credit rating and make it more challenging to acquire financing.
- Don’t use debt settlement companies: These companies often charge high fees and may be unable to settle your debt.
- Don’t rely on a quick fix: There is no easy solution to debt. It takes time and effort to pay it off.
- Don’t forget to budget: To prevent taking on extra debt, make a budget and follow it.
How Do You Make a Budget to Get Out of Debt?
Making a budget can be very helpful when you are in debt. You may reduce your spending by using a budget to have a complete image of where your funds are going. Setting a budget allows you to prioritize paying off your debts while covering essential costs.
Additionally, a budget can help you avoid taking on more debt by keeping track of your spending and ensuring that you don’t overspend. By creating a budget and sticking to it, you can take control of your finances and work towards becoming debt-free.
Here are some steps you can take to make a budget:
- Determine your income: List every stream of earnings, especially your salaries, any incentives or commissions, and all additional cash flow sources.
- Identify your expenses: Keep track of your monthly spending, including automobile, house, and other recurring bills, housing expenses, and car installments. List your fluctuating expenses, including food, leisure, and retail.
- Track your spending: Keep track of your spending for at least one month to better understand where your money is going.
- Set a budget: Use the information you’ve gathered to set a budget for each category of expenses. Be sure to include a category for savings.
- Stick to the budget: Once you’ve established a budget, follow it as strictly as possible. Routinely monitor to ensure that you’re on course with your spending plan and make any required modifications.
- Create a savings plan: Decide on a budgeting objective, such as saving for your social security or a house deposit on a property. Make a strategy to achieve your objective, such as allocating a specific sum of cash every week or monthly.
- Review and adjust: Review your budget and regular spending to see if there are areas where you can cut back or if you need to adjust your savings plan.
Keep in mind that building budgeting is a procedure that you must continue; if your earnings and expenditures change, you might need to make adjustments.
Breaking free from debt is not easy, but it is possible. By assessing your current financial situation, prioritizing your debts, creating a budget, increasing your income, staying motivated, and seeking professional advice, you can regain control of your finances and achieve financial freedom. Remember, it is not only about paying off debt but also about learning to manage your money to prevent you from falling into debt again.
Canada’s economy loses momentum as rate hikes take hold
Real gross domestic product rose 0.1 per cent in November, according to figures published Tuesday by Statistics Canada, with a preliminary estimate showing little change in December. All told, the economy grew at an annualized rate of 1.6 per cent in the fourth quarter, based on that estimate, which will be updated near the end of February.
Despite the slowdown, the economy is showing resilience as it faces mounting headwinds. Growth in the final months of 2022 was stronger than what the Bank of Canada and several financial analysts had predicted. Notably, employers continued to hire workers in droves, which kept the unemployment rate near an all-time low.
Also on Tuesday, the International Monetary Fund (IMF) projected the global economy would grow by 2.9 per cent in 2023, an upward revision from its previous estimate of 2.7 per cent. The IMF said its outlook was “less gloomy” than in October, citing “surprisingly resilient” demand in the United States and Europe, along with China’s reopening from strict COVID-19 measures. Global growth should accelerate next year, the IMF said.
In the interim, countries such as Canada are experiencing a loss of momentum. The Canadian economy grew at annualized rates of 3.2 per cent in the second quarter and 2.9 per cent in the third quarter, before its slide to an estimated 1.6 per cent in the final three months of 2022. That trend of slowing growth should continue.
The Bank of Canada expects the economy to stall during the first half of 2023. It has not ruled out a mild recession, an outcome that many analysts on Bay Street are expecting.
“It’s just as likely that we’ll have two or three quarters of slightly negative growth as slightly positive growth,” Bank of Canada Governor Tiff Macklem said at a news conference last week. “So yes, it could be a mild recession. It’s not a major contraction.”
In November, 14 of 20 industrial sectors managed to post growth. Transportation and warehousing rose 1 per cent for the month, boosted by a 4.6-per-cent surge for air transportation. The finance and insurance sector jumped by 0.5 per cent, after three consecutive monthly declines. The public sector expanded by 0.3 per cent.
At the same time, there was contraction in rate-sensitive industries. Construction fell 0.7 per cent in November as residential building and repairs hit a weak spot.
Retailers fared poorly in November as the industry dropped 0.6 per cent. The declines were particularly large at stores selling food, building materials and general merchandise.
Restaurants and bars also had a rough month, posting a 2.9-per-cent contraction.
“While the Canadian economy hasn’t cooled as quickly as we (and others) previously expected given the rapid rise in interest rates, there are growing signs of fragility,” Andrew Grantham, senior economist at CIBC Capital Markets, said in a note to clients.
He added: “The recovery in many services has slowed even with activity still well below pre-pandemic levels, and a dip in restaurant activity could be an early sign of consumers changing their behaviour in the face of inflationary pressures and rising interest rates.”
The Bank of Canada has raised interest rates at the fastest pace in a generation, taking its benchmark rate to 4.5 per cent from a pandemic low of 0.25 per cent in March, 2022. The central bank is intentionally trying to slow the economy and bring supply and demand into better balance to quell soaring rates of consumer price growth.
On that front, there has been recent progress. The annual rate of inflation has slowed to 6.3 per cent in December from a near four-decade high of 8.1 per cent in June. The central bank’s target is 2 per cent.
“Six-per-cent inflation is still way too high. Canadians are still feeling the pain of rapid increases in the cost of living,” Mr. Macklem said last week. “Economic developments have reinforced our confidence [that] inflation is coming down. But it’s going to take us a while to get there and the economy is going to be soft.”
After last week’s rate hike, the Bank of Canada is tentatively holding its benchmark rate at 4.5 per cent to assess whether its policies are restrictive enough to bring inflation back to target. It can take months, or even longer, for the full effects of higher interest rates to be felt. The bank cautioned that it would raise rates again if needed.
While growth could be sluggish to start the year, the Bank of Canada projects real GDP to expand 1 per cent in 2023. The IMF is projecting growth of 1.5 per cent in Canada, about the same as the United States.
With a report from Reuters
Italy’s economy contracts in Q4, raising recession fears
ROME — Italy’s economy shrank by 0.1% in the fourth quarter of last year from the previous three months, preliminary data showed on Tuesday, a slightly smaller contraction than expected but still raising fears of recession.
On a year-on-year basis, fourth quarter gross domestic product in the euro zone’s third largest economy was up 1.7%, national statistics bureau ISTAT said.
A Reuters survey of 23 analysts had forecast a 0.2% quarterly decline and a 1.6% rise compared with the year earlier.
While Italian output slipped slightly at the end of 2022, GDP across the whole euro zone expanded by 0.1% in the fourth quarter, Eurostat said, lifted by expansion in Spain and France.
Over the whole of last year, Italian GDP growth, adjusted for the number of working days, came in at 3.9%.
Looking ahead, the outlook has been clouded by sky-high inflation and energy costs, exacerbated by the war in Ukraine, which have sapped business and consumer confidence, crimped investments and hit families’ spending power.
Italian bank Unicredit, which had forecast Italian GDP to contract by 0.1% this year, said after Tuesday’s data that it was likely to upgrade its outlook to one of “modest growth.”
“The stock of excess savings accumulated during the COVID-19 pandemic still amounts to a sizeable 8% of nominal GDP, thus remaining a growth-supportive factor for this year,” said the bank’s chief Italian economist Loredana Federico.
Rome is officially forecasting growth of 0.6% this year, and the International Monetary Fund on Tuesday also sharply raised its own 2023 estimate to 0.6%, from a forecast of -0.2% made in October.
The Treasury estimated in November that the economy would contract in the fourth quarter of last year and the first quarter of 2023, dumping the country in recession – defined as two consecutive quarters of falling GDP.
ISTAT said the fourth quarter saw a fall in domestic demand, which negatively outweighed a positive contribution from trade flows.
It gave no numerical breakdown of components with its preliminary estimate, but said industry and agriculture had declined during the quarter, while services grew.
ISTAT confirmed a 0.5% quarter-on-quarter growth rate for the third quarter but revised up the Q3 annual expansion to 2.7% from a previously reported 2.6%.
It said so-called “acquired growth” going into 2023 stood at 0.4%, meaning that even if GDP is flat in each of the four quarters of this year, full-year growth will be up 0.4% from the year earlier. (Additional reporting by Stefano Bernabei; Editing by Crispian Balmer)
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