GDP Expectations Fall Following Banxico’s Private Sector SurveyBy Emilio Aristegui | Thu, 09/09/2021 - 16:49
Banxico’s latest monthly report indicates that the private sector expects inflation to rise, leading the bank to update its GDP forecast from 6.06 percent to 5.99 percent.
“Real GDP growth expectations for 2021 decreased in relation to the previous month, although the corresponding median increased. By 2022, perspectives on this indicator remained in levels close to those of the July survey,” reads Banxico’s report. The bank explains that it’s analysts based the adjustment on changes in indicators pertaining the labor market, public finance, perception of the economic environment, competition in Mexico and the behavior of the US economy, among other factors.
Quarter expectations fell as Banxico notes in its recent analysis: “The mean probability for a GDP drop increased compared to the previous month for 3Q2021, 4Q2021 and 1Q2022, while it decreased for 2Q2022.” Banxico, however, forecasts GDP growth in the long-term.
Mexico’s GDP faced an historic contraction during 2020. INEGI’s 1Q2021 report shows that GDP continued falling: “During 2020, GDP at constant prices registered a fall of 8.5 percent in relation to 2019, with seasonally adjusted series.”
As the country faces one of the worst economic setbacks of all time, local authorities are prioritizing Mexico’s economic recovery to its pre-pandemic numbers. Mexico’s slow growth continues to be frustrating in the country’s seeks an economic recovery, and the latest survey on private sector expectations leaves more doubts about whether Mexico can climb back to its original position.