Investment must be increased to restore Mexico’s GDP in 2019

The Mexican economy continues to recover along with that of the United States due to its synchronized cycle. But the insufficient physical investment and human capital prevalent in Mexico limit the ability to restore pre-pandemic levels of GDP, warned Alfredo Coutino, Latin America director at Moody’s Analytics consultancy.

They explained that in contrast to the United States, which this year will close its growth gap, Mexico will take three years to expand its GDP to the size it was in 2019.

And in an analysis entitled: “Same speed, different distance,” they explained that among the determinants of this slow recovery were “policy strategies applied to encourage economic recovery.”

They said that “the policies of support and stimulus in the United States were much larger than those few implemented in Mexico.”

Information from the Bank for International Settlements (BIS) shows that while the US responded to the shock of the pandemic with a fiscal stimulus plan equal to 10% of GDP, Mexico implemented one of the most modest in the world, close to 0.7% of the product as measured by the IMF. International.

“The two economies operate at similar speeds, but Mexico’s larger downturn and slow recovery of its production capacity makes a big difference in the time it will take to reach pre-pandemic targets,” he says.

In the second quarter of the year, the United States recovered and exceeded its pre-pandemic level of production by 0.8%, while Mexico’s production remained 2.5% below the volume reached at the end of 2019.

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Aileen Morales

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