S&P Raises Mexico's GDP to 6.2% for 2021
Mexico's Gross Domestic Product (GDP) growth projections for 2021 have been revised upward by S&P Global Ratings to 6.2% from 5.8% previously estimated.
S&P Global Ratings revised upward its projections for Mexico's 2021 Gross Domestic Product (GDP) growth to 6.2 percent from 5.8 percent previously estimated. It noted that the Mexican economy's growth in the second quarter was slightly better than it imagined, helped by a continued recovery in consumption, as shutdowns in the country due to the Covid-19 pandemic have been very limited in scope.
In the article "Economic Outlook for Latin America 2021," he noted that Mexico is benefiting, and will continue to benefit from, a strong recovery in the United States, through manufacturing exports and remittances, although manufacturing output has been affected by some disruptions due to the current global shortage of microchips. Despite this, exports are about 4.0 percent above the pre-pandemic level, and remittances as a percentage of GDP are about 1.0 percent higher than normal, the rating agency added.
It projected growth of 2.9 percent in 2022, unchanged from the previous estimate, with investment expected to be weak, especially outside the manufacturing sector, due in part to government policies that have reduced investment incentives in key sectors, such as energy. S&P anticipated that Mexico will return to its pre-pandemic GDP levels by early 2022.
Fitch Ratings upgrades Mexico's GDP to 5.9%
Fitch Ratings upgraded from 5.3% to 5.9% the growth outlook for Mexico at the close of 2021, due to the good performance of the Mexican economy in the second quarter.
"The 2021 Gross Domestic Product (GDP) industry breakdown showed that most of the increase was driven by the tertiary sector (hospitality, wholesale, transportation), as buoyant domestic demand and the reopening of the economy stimulated the services sector," the agency said.
In its global economic outlook update for September, Fitch Ratings expects Mexico's upside to stand at 2.8% in 2022 and to stand at 2% as of 2023. "Despite this improved outlook, we remain cautious in the near term," the firm said.
In the paper, the rating firm said COVID-19 cases have increased rapidly since late June and mobility data show that visits to retail and recreation sites are slowing.
For Fitch Ratings, the industry in Mexico is providing limited support for growth at present, with widespread weakness across all sectors, including the disruption of auto production due to ongoing semiconductor shortages. The agency noted that personal loans for the purchase of durable goods, mainly automobiles, continue to decline.
