The Economy of mexico could finally return to pre-pandemic levels sometime next year, the ratings agency said on Friday. Fitch Ratingsafter the Covid-19 pandemic brought the global economy to a halt in early 2020.
that year, the second largest economy in Latin America it suffered its biggest annual contraction since the Great Depression of the 1930s, but its recovery since then has been sporadic.
“Mexico’s economic recovery has lagged behind its peers both in the region and in ratings after the deep economic contraction caused by the pandemic in 2020,” said Carlos Morales, director of sovereign ratings at Fitch Ratings, in comments sent. by email to Reuters.
President Andres Manuel Lopez Obrador it resisted pressure to borrow to support the economy and allocated much less fiscal spending to deal with the pandemic than its regional colleagues, but it has had run-ins with some companies, especially in the strategic energy sector, which has investors baffled.
Real GDP is not expected to reach pre-pandemic levels until 2023, that is, Mexico will have an average cumulative growth rate close to zero between 2020 and 2023, according to Fitch projections,” Morales detailed.
The latest GDP data showed that Mexico’s economy grew 0.9% in the second quarter compared to the immediately previous one, slightly below the preliminary data but enough to take the country to its second consecutive positive quarter. It expanded 2.0% compared to the same period of the previous year.
Analysts have warned that a recession in the United States, Mexico’s biggest trading partner, could also hurt the Latin American nation’s still fragile economic recovery.
“Our base forecast does not foresee a recession in Mexico or the United States, but in a scenario in which the US economy suffers a greater recession than we expect, Mexico will not emerge unscathed,” warned Joan Domene of Oxford Economics, in a note. investigation last month.
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