Mexico faces challenge of heterogeneous economic recovery, says Central Bank president

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

, Mexico faces challenge of heterogeneous economic recovery, says Central Bank president

RIO DE JANEIRO, BRAZIL – Mexico’s economy contracted 8.5% in 2020, in the deepest recession in nearly 90 years, due to the ravages of the Covid-19 pandemic. However, the economy recovered faster than initially projected in the last quarter of 2020.

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

The robust US$1.9 trillion pandemic relief package in the United States, Mexico’s main trading partner, will likely help drive the recovery of the Mexican economy.

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

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

Source: Moneytimes