Madrid, March 15 (Europe Press) –
Mexico’s GDP will not restore previous levels of the epidemic until 2024, due to the country’s strong economic downturn during 2020, according to an analysis by Crédito y Caución.
According to the company, the North American country has demonstrated “a high vulnerability to the effects of the epidemic and limited fiscal and monetary measures, which expect slow and gradual growth to return.”
Among the reasons explaining the great impact of the virus on the Mexican economy are the fragility of the Aztec health system, its “close coincidence” with the US economic cycle, and its heavy dependence on tourism. In addition, the main export sector, automobiles, has suffered from a sharp drop in external demand and serious supply chain disruptions.
On the other hand, Crédito y Caución notes that the fiscal and monetary measures taken by the government of Andres Manuel Lopez Obrador to counter the slowdown have been limited. The study indicates that “the central bank maintains interest rates at 4%, which is a relatively high level, and that financial incentives are barely equivalent to 1% of GDP.”
The report notes that merchandise exports should receive a boost thanks to the US economic outlook. However, prospects for recovery still depend on the evolution of the pandemic and implementation of vaccines.
In this context, the recovery will be slow and gradual, while uncertainty in economic policy and concerns about institutional stability will continue to negatively affect business confidence.