Mexico City. The Bank of Mexico (BdeM) raised its estimate of economic growth for this year from 4.8 to 6 percent, given the better-than-expected performance during the first quarter and the expectation that from the second quarter the recovery will occur at a slower pace. .
In its quarterly report from January to March 2021, the Central Bank indicated that, however, given the continuing uncertainty about the dynamics of the outlook for economic activity, it is believed that the country’s economic growth may range between 5 and 7 percent in 2021.
In this way, the BdeM forecast is lower than the 6.5% forecast by the Ministry of Finance and Public Credit, but higher than the 5.15 forecast by private sector professionals.
For 2022, the Central Institute also revised its scenario down, projecting 3% growth, when last quarter was 3.3%.
The bank explained that if growth in 2021 is achieved near the top of the time period, economic activity will recover in the last quarter of the year, the level observed at the end of 2019.
Meanwhile, as growth approaches the intermediate point of the time periods, the recovery will occur in the second quarter of 2022. As growth approaches the bottom of the two periods, the level observed at the end of 2019 will be reached in early 2023.
Indicate the risks
Alejandro Diaz de Leon, Governor of BdeM, warned that challenges to the country’s recovery and an environment of high uncertainty still prevail, especially since the Covid-19 pandemic has not yet dissipated.
However, he said, the upward revision in global growth, especially in the United States, progress in vaccination campaigns in many countries, including Mexico, and fewer restrictions on movement lead to more favorable forecasts for the upcoming seasons.
Therefore, it is considered that the risks to growth tend to balance out on the forecast horizon.
Among the risks to the country’s growth, it should be noted that there are delays in the production, distribution or application of vaccines or that there is an exacerbation of the epidemic at the global and national levels, which means the adoption of new measures to contain it.
There are also potential bottlenecks in supply chains at the global level that lead to a shortage of inputs for some sectors in Mexico, particularly the automotive sector.
that additional bouts of volatility are observed in international financial markets and the financing flows of emerging economies are affected; That the recovery of investment is less than expected, and remained at low levels compared to what is needed to support the recovery.