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The 2022 economic package reinforces the commitment to fiscal discipline. The forecast of higher tax revenue is supported by improved intake practices and streamlining actions with more fiscal oversight for the compliance of tax payments. The federal law of income does not contemplate creating or raising taxes.
Economic activity with a favorable evolution in 1Q21 (0.4% QoQ) with mixed performance among its components. The tertiary sector grows 0.7% QoQ in the first quarter of the year driven by the higher mobility registered in recent months.
Strong real GDP growth in 1Q21 on the back of massive fiscal support, accommodative monetary policy, a successful vaccination campaign and the reopening of the economy.
The economy could experience a period of bonanza not seen in decades. Strong recovery boosted by successful vaccination campaign, reopening of services, low interest rates, and massive fiscal stimulus. Flat Phillips curve and elevated slack limit inflationary pressures.
GDP declined 6.8% in 2020. In the major demand groups, only government consumption grew and, in the productive branches, four out of twelve expanded. The economy had a sustained recovery since the third quarter that will be consolidated in the second half of 2021. GDP growth of 4.8% is expected in 2021.
Economic activity showed a favorable evolution in 4Q20, with positive performances in all its components, except for the primary sector. Vaccines essential factor for recovery in 2021.
Economic activity continued to expand in the fourth quarter of 2020, albeit at a much slower pace. This reflected both solid ongoing momentum and the negative consequences of lower fiscal support and rising Covid-19 cases.
The degree of uncertainty surrounding the performance of the country's economy this year is much higher than usual. For example, before the pandemic, Banxico's growth forecasts were presented in ranges of 1pp between the most pessimistic and the most optimistic scenarios. This time, the range is almost five times higher.