In 2021, the Mexican economy did not grow as expected as the third and fourth wave of COVID contagions introduced new challenges. Inflation and interest rates were also on the rise, coupled with consecutive drops in GDP for 3Q21 and 4Q21, putting the country in a technical recession. As a result, BBVA, Citibanamex, B of America and The Central Bank of Mexico have all cut their growth expectations for 2022. Similarly, the International Monetary Fund (IMF) reduced Mexico’s growth forecast by 1.2 percentage points as COVID-19 has once again disrupted supply chains internationally. The economy is now estimated to grow 2.8 percent in 2022, down from the previously projected 4 percent.
In addition to the challenges resulting from COVID-19 and inflation, experts say the economy will take a hit from its trade relationship with the US as exports have weakened. These same experts say Mexico’s fiscal austerity is what has prevented the country from recovering its pre-pandemic levels.
