IMF improves growth forecast for Mexico in 2021 from 4.3% to 5% – El Financiero

The International Monetary Fund (IMF) expects the Mexican economy to grow by 5 percent this year, 0.7 percentage point more than expected in January.

Additionally, for 2022, it expects GDP to adjust its growth to 3 percent, up 0.5 percentage points from its previous WEO report, in line with the best performance-driven projected figures for the global economy. From developed economies.

The outlook for the global economy has improved due to the upward revisions in the forecast for the advanced economies Mainly for the United States, The expected recovery of its GDP is 6.4 percent and 3.5 percent in 2021 and 2022, respectively, 1.3 and 1 percentage point higher than expected in January.

Thanks to the approved fiscal stimulus package, it is estimated that the United States will return to its levels at the end of 2019 in the first half of 2021 and Japan in the second half.

With these improvements in advanced economies, the IMF improved its forecast of global GDP by half a percentage point to 6% in 2021, and for 2022 to 4.4%, it improved by 0.2 percentage point, after contracting by 3.3% in 2020.

The rise in global projections for 2021 and 2022 is attributed to advanced economies, particularly the upward revision in the United States of 1.3 percentage points, which is expected to grow by 6.4 percent this year. This makes the United States the only major economy expected to outpace projected GDP growth for 2022 in the absence of a pandemic. Other advanced economies, including the eurozone, will rebound this year, albeit at a slower pace. Among emerging economies, China is expected to grow by 8.4 percent this year, said Gita Gopinath, Director of Analysis at the International Monetary Fund.

However, he warned of the enormous challenges ahead as expected Average annual loss in GDP per capita during the period 2020-2024As for the pre-pandemic projections, it will be 5.7 percent in low-income countries and 4.7 percent in emerging markets, while losses in advanced economies are expected to be 2.3 percent lower.

Losses in GDP per capita reverse poverty reduction; An additional 95 million people are expected to join the ranks of people in extreme poverty in 2020 compared to pre-pandemic projections.

A high degree of uncertainty surrounds our expectations. Progress faster with vaccines It could raise the prognosis, while a longer epidemic with viral variants evading vaccines could lead to severe deterioration. Paybacks at different speeds can pose financial risks if interest rates in the United States rise unexpectedly. This could cause a drop in inflated asset valuations in an unregulated manner, a drastic tightening of financial conditions, and worsening prospects for recovery, especially for some highly leveraged emerging markets and developing economies, ”Gopinath wrote in the International Monetary Fund’s blog on global economic prospects. .

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