Economics

Mexico’s Economy Faces Gloomy 2022 as Growth Decouples From the U.S.

BofA slashes growth forecast for this year from 2.5% to 1.5%
Tight fiscal and monetary policy uncertainty to hurt growth

A worker moves a trolley of avocados at the Grupo Aguacatero Mexicano (Gamex) packing facility in Periban, Michoacan state, Mexico, on Thursday, Sept. 23, 2021. The avocado industry is worth $2.4 billion annually, it pays workers as much as 12 times Mexico’s minimum wage, and it offers high profit margins for local landowners. Over three-quarters of Mexico’s production comes from the state of Michoacan.Photographer: Jeoffrey Guillemard/Bloomberg

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By Max de Haldevang

January 11, 2022 at 8:04 PM UTC

This article is for subscribers only.

Mexico’s economy is probably in for a rough year in 2022, as the boost it gets from U.S. growth is outstripped by blows from tight fiscal and monetary policies and uncertainty over the government’s agenda.

Bank of America Corp. slashed its growth forecast from 2.5% to 1.5%, analysts led by chief Mexico and Canada economist Carlos Capistran wrote in a note Tuesday. Speaking in a video conference afterward, he said Mexico’s production numbers now likely won’t reach pre-pandemic levels until next year.