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After knowing the preliminary estimate of Mexico’s Gross Domestic Product (GDP) for 2021, economists from Goldman Sachs, Banco Base and the business consultancies Pantheon Macroeconomics and Oxford Economics cut their expectations for this year.

Banco Base’s central scenario is growth of 1.5%, which will be the constant rate for the performance of the economy in the long term.

“We will have a lost six-year term in terms of economic growth, where the GDP will return to pre-pandemic levels until 2024,” clarified the director of economic and financial analysis at Banco Base, Gabriela Siller.

The directive projected that if the electrical reform is approved as it is, this expected performance can be revised downwards, due to the impact that it will have on the mood of investors.

Goldman Sachs, Pantheon Macroeconomics and Oxford Economics agreed in anticipating growth of 2% with downside risks, a rate that is lower than the 2.2% they had at the start of the year.

In 2022 we will not have any more statistical drag like the one that occurred in 2021, Alberto Ramos, economist for Latin America at Goldman Sachs, said from New York. The growth projection for Mexico’s GDP indicates a fairly weak recovery in an environment of uncertainty for investors, he explained.

The perception of the headwinds to Mexican growth are very similar to those of the senior economist for Latin America at Pantheon Macroeconomics, Andrés Abadía.

The strategist acknowledged that risks will remain tilted to the downside mainly due to heightened political uncertainty, inflationary pressures and persistent global supply issues. The outlook for the first semester is challenging given the impact of Covid-19, he said.

Under review at Banorte

Economists led by the deputy general director of economic analysis at Banorte, Alejandro Padilla, report that the annual rate is moderating and this weakening warrants reviewing the estimate for GDP in 2022.

The risks are to the downside on the growth expectation that remains at 3% right now, they highlighted. The revised expectation will be announced on February 25, once the final GDP data is available, which will be released by the 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 engine of Mexican growth, which is the United States, is less dynamic, as well as incorporating the impact of a more restrictive monetary policy that would respond to inflationary pressure.

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