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Mexico | The economic recovery will be slow and square root shaped

Published on Friday, June 19, 2020 | Updated on Wednesday, June 24, 2020

Mexico | The economic recovery will be slow and square root shaped

Our base case for 2020-2025 GDP growth forecasts does not point to the recovery of the fourth quarter 2019 GDP level until the end of 2023.

Key points

  • Key points:
  • But given the downward bias to our 2020 GDP growth forecast more towards the lower limit of our forecast interval ranging between -6% and -12%, the recovery of such level would not occur until after 2025
  • The anticipated recovery of GDP after the Covid-19 pandemic effect shows that it would neither have a “V” nor “U” shape but would look more like the square root symbol
  • Using the intervention analysis methodology, we estimate that such effect on the 2Q20 GDP will be -10.8% and -16.0% in relation to 1Q20 under our base and adverse scenarios, respectively
  • This methodology also indicates that the magnitude of such effect will vanish very slowly and will be lower than 1.0% in two and four years under the base and adverse scenarios, respectively

Associated documents for downloading

  • Report (PDF) 200619_PandemicEffectGDP.pdf English June 24, 2020
  • Report (PDF) 200619_EfectoPandemiaPIB.pdf Spanish June 19, 2020

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