RIO DE JANEIRO, BRAZIL – Latin America’s second-largest economy is expected to grow 5.3% in 2021, down from an earlier projection of 4.6%, and then expand 3.6% in 2022, according to a budget document published by the ministry.
“We estimate that by early 2022 the economy will fully recover to pre-pandemic levels, sustained by the resumption of domestic market dynamism fueled by vaccination and the reopening of activities,” the document said.
Mexico’s economy was already in a mild recession in 2019 and then contracted around 8.5% in 2020, its largest drop in nearly 90 years, due to the profound impacts of the Covid-19 pandemic. However, the economy recovered faster than initially estimated in the last quarter of 2020.
Vaccine distribution and “sustained efforts by governments and central banks worldwide to mitigate the impacts of the pandemic” suggest that the recovery in 2021 will be faster than previously projected, the ministry document said.
An expected acceleration of economic recovery in the United States, Mexico’s main trading partner, “supported by its vaccination campaign and the fiscal stimulus of 1.9 trillion dollars approved on March 10, will give an additional boost to Mexico and several sectors closely linked to trade, such as agriculture, agribusiness, and industry,” the document adds.