Financial Advance Slows Down in August

The financial outlook for 3Q21 is beginning to show significant signs of a slowdown, according to INEGI’s Timely Indicator of Economic Activity (IOAE). This suggests a more difficult environment for economic activity during the quarter, agree financial experts. 

The IOAE points to signs of caution regarding the economic recovery following the advance of 1.5 percent quarter-over-quarter made during 2Q21. One of the most pressing factors is the rebound of the COVID-19 Delta variant and its effect on the confidence of companies and households. On the other hand, Banorte anticipates no changes to services in August, which might limit the economic impact of the pandemic in comparison to previous waves. 

According to Banorte’s report, “The forecast is 6.8 percent year-over-year (range: 5.4 percent to 8.1 percent), which would result in -0.2 percent month-over-month. The industry is estimated to have a fall (-0.5 percent month-over-month), indicating that supply and COVID-19 problems continued. Services would be unchanged (0.0 percent), which would be favorable since new maximums of daily infections were reached on several occasions in the period.” 

While several industries bounced back during July, they were hit again during August, complicating the potential recovery. The industry remains in a difficult situation, warn  Banorte experts, with greater uncertainty due to the deterioration of the virus’ conditions, the problems in the supply chains–which are expected to continue during 2022–and other factors. “Although we expect the industry to close stronger in the second half of the year, risks continue to be skewed to the downside, especially due to the permanence of the pandemic and related distortions.”

Financial forecasts in Mexico continue to evolve as the pandemic and national and international influences take hold. Previously, experts forecasted that the growth rate that Mexico had seen for several past months would end soon, warning investors to be prepared for the changes to come, as reported by MBN.