Mexico Faces A Two-Speed Recovery

• Fitch Solutions forecast real GDP in Mexico will grow 3.8% in 2021, after contracting 8.3% in 2020 according to preliminary estimates.
• While recent high-frequency data suggests Mexico's economic rebound is broadening, with a recovery in the industrial and services sectors, the worsening of the pandemic implies a near-term slowdown in momentum.
• Over the coming quarters, the agency expects a divergence will become visible between the export-oriented manufacturing sector, which will benefit from robust US demand, and weak domestic consumption due to the lingering effects of the pandemic.

(Source: Fitch Solutions)