Economy

Mexico faces heterogeneous economic recovery, says Banxico President

The Mexican economy shrank 8.5% in 2020, in the deepest recession in almost 90 years

Banxico's President, Alejandro Díaz de León. Photo: REUTERS / Luisa Gonzalez
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  • The US aid package is likely to help boost the recovery of the Mexican economy;
  • Last year, the most important component for the recovery of economic activity in Mexico was foreign demand and the export sector.

Mexico faces a “new challenge” as different parts of its economy will recover at varying rates, with export-dependent sectors expected to lead the way, said the country’s central bank president, Alejandro Díaz de León, on Monday.

The Mexican economy shrank 8.5% in 2020, in the deepest recession in almost 90 years, due to the COVID-19 pandemic havoc. Yet, the economy recovered faster than initially projected in the last quarter of 2020.

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“The new challenge is that economic activity and recovery will be heterogeneous, driven by two engines. The engine of vaccines… and the engine of fiscal spending that different economies have implemented, ”said Díaz de León.

The robust $1.9 trillion pandemic relief package in the United States, Mexico‘s main trading partner, is likely to help boost the recovery of the Mexican economy.

Last year, the most important component for the recovery of economic activity in Mexico was foreign demand and the export sector, well above consumption and investment, said Díaz de León.

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“And we project that this important spending and stimulus program in the United States will help foreign demand to continue to play an important role in Mexico‘s economic recovery”, he added.

(Translated by LABS)

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