Published on Thursday, October 21, 2021 | Updated on Tuesday, November 16, 2021

Mexico Economic Outlook. Fourth quarter 2021

Rising inflation in Mexico is due to supply shocks and will subside next year. Economy recovers from the crisis, but in a slow and incomplete way.

Key points

  • Key points:
  • Downward revision to our growth estimate for 2021 to 6.0% (6.3% previously) given the weakness of domestic consumption and the extension of bottlenecks.
  • The pace of formal job creation (IMSS) accelerated in 2H21, but high levels of labor informality and underemployment prevail.
  • We anticipate inflation will continue to be high in the coming months due to changes in relative prices, but it will decline strongly as of 2Q22.
  • Banxico will increase the monetary rate in the next two meetings to reach 5.25%; afterwards it would start a pause with the expectation that inflation will decline markedly as of 2Q22.
  • The current balance in the electricity sector can be improved, but the reform would be a serious regression.

Associated documents for downloading

  • Presentation (PDF) Situacion-Mexico-4T21_eng.pdf English November 16, 2021
  • Report (EPUB) Mexico-Economic-Outlook-4T21-BBVA-Research.epub English October 26, 2021
  • Report (EPUB) Editorial-Situacion-Mexico-4T21-BBVA-Research.epub Spanish October 21, 2021
  • Report (PDF) Situacion-Mexico-4T21-BBVA-Research.pdf Spanish October 21, 2021
  • Presentation (PDF) Situacion-Mexico-4T21.pdf Spanish October 21, 2021



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