Mexican economy would be in technical recession, according to economists

The signs point to Mexico entered a recession, while the first estimates show that economic activity fell in December.

The second largest economy in Latin America contracted in the third quarter of last year, putting a brief recovery in the economy on hold. pandemic. Now a growing number of institutions, including Bank of America Corp, Banco Bilbao Vizcaya Argentaria SA, Monex Casa de Bolsa and Bloomberg Economics, are forecasting that gross domestic product will contract again in the last three months of 2021.

That would put the country into a technical recession, which is defined as two consecutive quarters of quarter-on-quarter GDP contraction. Data published this week by the National Institute of Statistics and Geography projected that economic activity fell 0.2% last month, which would mean that it fell in two of the last three months of 2021.

A group of economists also cut its growth forecasts for 2022, while Bank of America projected only 1.5%. Banxico, as the country’s central bank is known, still sees a 3.2% expansion this year, though those figures may still be revised.

“If 2021 was a year of incomplete recovery, 2022 will be a challenging year,” wrote Gabriela Siller Pagaza, an economist at Banco Base SA, who forecast a growth range of between 1.5% and 2%. “Further revisions to growth expectations are not ruled out, as there are many downside risks for economic activity.”