After learning the preliminary estimate of Mexico’s GDP for 2021, economists from Goldman Sachs, Banco Base, business consultancy Pantheon Macroeconomics and Oxford Economics lowered their forecasts for this year.
Banco Base’s central scenario is 1.5% growth, which is the constant rate of the economy’s long-term performance.
“We will have a lost six-year period in terms of economic growth, in which GDP will return to pre-pandemic levels until 2024,” explained Gabriella Seiler, director of economic and financial analysis at Banco Base.
The guidance anticipates that if the electrical reform is approved as is, this expected performance could be revised downward, given its impact on investor sentiment.
Goldman Sachs, Pantheon Macroeconomics and Oxford Economics all agreed to forecast 2% growth with downside risks, down from 2.2% at the start of the year.
In 2022, we won’t have any more statistical draws than in 2021, said Alberto Ramos, Latin America economist at Goldman Sachs, New York. He explained that Mexico’s GDP growth forecast points to a rather weak recovery in An uncertain environment for investors.
The perception of the headwind of Mexican growth is very similar to that of the chief economist for Latin America at Pantheon Macroeconomics, Andrés Abadía.
The strategist acknowledged that risks will remain tilted to the downside due to escalating political uncertainty, inflationary pressures and persistent global supply issues. He said the outlook for the first semester is tough given the impact of Covid-19.
Under review in Banorte
Economists led by Banorte’s Deputy Director General for Economic Analysis, Alejandro Padilla, reported that the annual rate is moderate and that this weakness warrants a revision of GDP estimates in 2022.
They noted that risks to the downside from the growth forecast remain at 3% for the time being. The revised forecast will be announced on February 25, once final GDP data is available, which will be released by Inegi.
Just last week, the International Monetary Fund cut its forecast for Mexico to 2.8%, and the Economic Commission for Latin America and the Caribbean left it at 2.9%. Both organizations argue that the external driver of Mexican growth, the United States, is less dynamic, as well as incorporating the effect of more restrictive monetary policy that would respond to inflationary pressures.