Mexican finance minister bullish about 2021

Citing factors including the rollout of COVID-19 vaccines and infrastructure spending in Mexico and the United States, Mexican Finance Minister Arturo Herrera said at a late March presentation that his nation could experience 5 percent gross domestic product (GDP) growth in 2021.

That outcome would represent a nice recovery from the 8.5 percent GDP retreat Mexico experience in 2020, when it experienced its own public health and activity restriction measures and, likewise, was affected by similar conditions in the U.S.

As reported by Reuters, Herrera provide the possibility of 5 percent GDP growth while speaking with students at the National Autonomous University of Mexico (UNAM).

Herrera’s optimism could stem in part from a GDP rebound that has already started in the first quarter of 2021. He also specifically referred to the proposed $1.9 trillion infrastructure proposal in the neighboring U.S. as a potential harbinger of good things to come for Mexico’s basic materials and machinery producers, according to media reports.

On the government of Mexico website, a posted chart shows a range of 2021 GDP growth forecasts for the nation, with that of the Banco de Mexico Escenario Central checking in as the most optimistic at 4.8 percent.

The World Bank, meanwhile, has predicted 3.7 percent GPD growth, the International Monetary Fund (IMF) 4.3 percent growth, and the Organization for Economic Cooperation and Development (OECD) 4.5 percent growth for 2021.

In his late March comments, Herrera pointed to higher oil prices as working in Mexico’s favor and indicated the government intends to close some tax loopholes before seeking higher flows into the nation’s federal treasury.

According to Reuters, “Mexico’s tax revenue as a percentage of GDP is the lowest in the 37-nation OECD. The IMF has proposed Mexico reform its tax system to support spending and the economy.”

On the vaccination front in Mexico, President Andres Manuel Lopez Obrador was reportedly preparing in late March to deploy more military, state and local personnel to be involved in distributing some 1.7 million AstraZeneca inoculations that had been shipped from the U.S.

According to an online report from Aljazeera, approximately 6 million vaccines have been taken by Mexican citizens. Those were predominantly two Chinese-made vaccines, and polling in Mexico indicates suspicion exists among those surveyed about their effectiveness.