The International Monetary Fund also foresees an advance in GDP of just 0.2 percent for the current administration.
The International Monetary Fund (IMF) improved the growth forecast for the Mexican economy for 2021, to 3.5 percent, from its previous forecast of 3.3 percent.
However, it foresees that the recovery will later moderate towards levels of just over 2.0 percent, and the growth expectation for the entire six-year term will be just 0.2 percent.
In its World Economic Outlook (WEO) report, the agency predicted that this year Mexico’s Gross Domestic Product (GDP) will fall 9.0 percent, instead of the 10.5 percent projected in June.
With this estimate, Mexico has a fall greater than 8.1 percent, a figure anticipated for Latin America as a region, and the 5.8 percent forecast for Brazil.
In addition, it becomes the second emerging economy with the largest contraction this year, only after India, which the IMF estimates has a decline of 10.3 percent.
In addition to the above, it also exceeds the magnitude of the impact that the pandemic crisis will leave in other latitudes such as South Africa. where the IMF has predicted a GDP reduction of 8 percent, and in the case of China, a 1.9 percent GDP rebound is expected to take effect by 2021, with an increase of 8.2 percent.
Carlos González, director of analysis and strategy at Monex, indicated that the economic recovery of the American Union does influence Mexico, which is, to a large extent, the product of the fiscal stimuli granted under the management of Donald Trump.
Amín Vera, the chief economist at BW Capital, explained that “the latest IMF report shows that a large part of the world economy is already reflecting a certain recovery with respect to the floor that was reached between March and June and that it corresponded to the implementation of the strictest social isolation measures ”.
Ernesto O’Farrill, president of Bursamétrica, said that according to the latest available data on economic activity, he does see that it is possible for Mexico’s economy to contract 9 percent this year.
On the other hand, the IMF acknowledged that the entry into force of the T-MEC (USMCA) reduced uncertainty in the short-term trade policy in North America, but warned of some possible obstacles in its implementation.
“Persistent frictions, for example over aluminum, rules of origin in the automotive sector and the dairy trade, could hamper implementation. Trade policy uncertainty could increase again in these contexts or in discussions with other trading partners, which would affect global growth, ”the IMF said.
In the case of world GDP, it improved its estimates for 2020 by noting a contraction of 4.4 percent, a less pronounced drop than the 5.2 percent forecast in June, and attributed to the better-than-expected performance in advanced economies.
For 2021, it forecasts world growth of 5.2 percent but warned that the recovery will be long and uneven and that the figure will also be lower than the 5.4 percent of the previous forecast.
The agency also estimated a fall in the United States economy of 4.3 percent, instead of the 8.0 percent that was projected last June and by 2021 a rebound of 3.1 percent is anticipated, down from the previous 5.4 percent.
LA will recover until 2023
The performance of the main Latin American economies, Mexico and Brazil, suggest that the region’s economy will return to pre-pandemic levels until 2023, later than the rest of the world, said Gita Gopinath, director of the Analysis Department. of the IMF.
“For many countries, we expect GDP to return to 2019 levels in 2022, but for some regions, the return will be longer, for example in Latin America, where it is estimated until 2023 when it returns to pre-pandemic levels,” he stated. during the conference to present the World Economic Outlook report.
According to the agency, Latin America will suffer a GDP contraction of 8.1 percent and in 2021 it will partially recover by 3.6 percent.
According to estimates, Chile’s GDP would reach the 2019 level in 2022, Brazil and Colombia will do so in 2023, and Mexico until 2024.