Mexican Growth Revised Higher In 2021, Though Pace Will Moderate In H2

• After the Mexican economy outperformed Fitch Solutions’ expectations in H121, the agency has revised up its 2021 real GDP growth forecast to 6.0% y-o-y, from 5.5% previously. 
• On July 30, Mexico’s statistics agency INEGI released preliminary figures showing that real GDP grew 19.7% y-o-y in Q221, contributing to 7.0% growth in H121. Fitch’s last forecast in late May projected growth of 18.4% in Q221 and 6.4% in H121, both lower than the preliminary numbers. This reflected a stronger performance in the agricultural and services sectors than expected. 
• Despite the continued spread of COVID-19 and the presence of activity restrictions throughout the quarter, the Mexican economy’s growth is in line with a broad trend in Latin America of consumers and businesses adapting to the pandemic.  
• Note, however, that a third wave of COVID-19 cases and a lack of fiscal and monetary stimulus will cause the overall pace of growth to moderate moving forward.

(Source: Fitch solutions)