Mexico Economic Outlook
September 14, 2021The economy gained steam in Q2 according to a comprehensive release. The services sector underpinned the reading, aided by surging remittances, healthier consumer confidence and lower domestic Covid-19 cases, although the industrial sector was likely held back by supply issues. Turning to Q3, the economy appears to be losing some steam amid surging Covid-19 cases. Through August, both the manufacturing and non-manufacturing PMIs pulled back, while consumer confidence fell. However, the authorities’ fairly moderate approach regarding new restrictions should be limiting the fallout, while remittances continued to soar in July on an improving U.S. labor market, which should be supporting domestic consumption. In other news, in September the government presented the 2022 budget, which marks a slight loosening of austerity.
Mexico Economic GrowthActivity is set to pick up in 2021 as rapid growth in the U.S. aids remittances and exports. However, a fairly tight fiscal stance and the still-raging pandemic at home will keep a lid on domestic demand. A still-sluggish vaccine rollout and an uncertain business environment—amid the president’s attempts to increase the state’s role in the energy sector—cloud the outlook. FocusEconomics panelists project the economy to expand 5.9% in 2021, which is up 0.1 percentage points from last month’s forecast. In 2022, they see GDP growth waning to 3.0%.
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Mexico Economic News
September 9, 2021
Consumer prices rose 0.19% in August over the previous month, below the 0.59% increase recorded in July.
September 8, 2021
In early September, the government presented the 2022 budget—the first prepared by the new Finance Minister Rogelio Ramirez de la O—which aims for a small primary deficit and for the overall fiscal shortfall to remain broadly unchanged as a percentage of GDP. As such, while the fiscal stance is still cautious, it is slightly less restrictive than the 2021 budget, which could provide activity with a mild boost next year.
September 2, 2021
Consumer confidence fell to 42.7 in August from July's 43.9 amid spiking Covid-19 cases.
September 1, 2021
Remittances tallied USD 4.5 billion in July, representing a 28.6% year-on-year rise.
September 1, 2021
The Mexican Institute of Financial Executives (IMEF) Manufacturing Purchasing Managers’ Index (PMI) fell to 51.3 in August from July's 51.9.