After knowing the preliminary estimate of Mexico’s Gross Domestic Product (GDP) for 2021, economists from Goldman Sachs, Banco Base and business consultants Pantheon Macroeconomics and Oxford Economics lowered their expectations for this year.
Banco Base’s central scenario is growth of 1.5%, which will be the constant rate for the long-term performance of the economy.
“We will have a lost term of six years in terms of economic growth, where GDP will return to pre-pandemic levels by 2024,” explained Gabriela Siller, director of economic and financial analysis at Banco Base.
The directive projected that if the electrical reform is approved as it is, this expected performance could be revised downwards, due to the impact it will have on investors’ minds.
Goldman Sachs, Pantheon Macroeconomics and Oxford Economics agreed to expect 2% growth with downside risks, a rate lower than the 2.2% they had at the beginning of the year.
In 2022, we will no longer have statistical delays like the one that occurred in 2021, said Alberto Ramos, economist for Latin America at Goldman Sachs, from New York. The growth projection for Mexico’s GDP indicates a rather weak recovery in an environment of uncertainty for investors, he explained.
The perception of the winds of Mexican growth is very similar to that of the senior economist for Latin America at Pantheon Macroeconomics, Andrés Abadía.
The strategist acknowledged that risks would remain tilted to the detriment mainly due to increased political uncertainty, inflationary pressures and persistent global supply issues. The prospects for the first semester are challenging given the impact of Covid-19, he said.
Under review at Banorte
Economists led by Banorte’s deputy chief economic analysis chief Alejandro Padilla report that the annual rate is moderating and justifying this weakening to revise the 2022 GDP estimate.
The risks are on the negative side of the growth expectation which currently remains at 3%, they stressed. The revised forecast will be announced on February 25, once the final GDP data is available, which will be released by Inegi.
Just last week, the International Monetary Fund lowered its forecast for Mexico to 2.8%, and the Economic Commission for Latin America and the Caribbean dropped it to 2.9%. Both organizations argue that the external engine of Mexican growth, which is the United States, is less dynamic, as well as the impact of a more restrictive monetary policy that will respond to inflationary pressures.
Reference-www.eleconomista.com.mx