MEXICO CITY, Sept 1 ― Mexico's economy will grow by 6.2 per cent this year after a deep pandemic-induced recession in 2020, the central bank predicted yesterday, in the latest upgrade to its forecast.
In June, the Bank of Mexico had predicted growth of 6.0 per cent for Latin America's second-largest economy in 2021, after a forecast in March of 4.8 per cent.
The Mexican economy shrank 8.5 per cent in 2020, according to official figures, in the worst slump since the Great Depression some nine decades ago.
In its quarterly inflation report, the central bank said that the latest upgrade was mainly due to a better than expected second quarter, when the economy grew 19.5 per cent year-on-year.
Progress in Mexico's coronavirus vaccination program and the relaxation of restrictions on economic activities helped to boost growth, it said.
The central bank said that this year's growth could miss or exceed its central forecast within a range of 5.7-6.7 per cent.
“Considering the persistence of some disruptions in global supply chains and the recent increase in the number of Covid-19 infections, there is still high uncertainty about the rate of the recovery in economic activity,” it cautioned.
Inflation is expected to remain above 5.0 per cent until early 2022 before moving down towards the official target of around 3.0 per cent in early 2023, the central bank forecast.
Inflation stood at 5.81 per cent in July on an annual basis ― outstripping the target rate for a fourth straight month.
The central bank has raised its benchmark interest rate twice this year, to 4.5 per cent, in an effort to contain growing price pressures. ― AFP
