For 2021, private analysts estimate GDP growth of 6.10%

02/08/2021

In July, private sector specialists consulted by Banco de México (BdeM) forecast higher economic growth for this year compared to last month's estimate; however, they also warned of higher inflation. According to the Survey of Expectations of Private Sector Economic Specialists: July 2021, private analysts estimate a GDP of 6.10 percent for this year, an improvement over the 5.80 percent they forecast a month earlier.

Thus, the estimate of financial institution specialists is closer to the federal government's estimate of 6.5 percent. This follows last year's deep 8.3 percent drop due to the Covid-19 pandemic. However, analysts also warn about higher inflation in the country, as they increased their estimate for the end of this year to a level of 6 percent from 5.6 percent.

The price index will close the year outside the central bank's target of 3 percent +/- one percentage point.

The high level of inflation has begun to worry both analysts and BdeM itself, to the extent that at its last monetary policy meeting, its board of directors decided to increase the reference interest rate by a quarter of a percentage point to 4.25 percent. Specialists consulted in July by the central bank expect the reference rate to close the year at 5 percent.

As for the expected annual variation in the number of insured workers in the Mexican Social Security Institute, there was an improvement by the end of 2021, from 450 thousand to 490 thousand. While for 2022 it remained at 360 thousand. The estimate for this year's trade balance decreased from 7.65 billion dollars to 5.5 billion dollars; the current account balance decreased from 3 billion to 2.4 billion dollars and foreign direct investment decreased from 27.572 billion to 27.72 billion dollars.