Mexico Economic Outlook. First quarter 2021

Economic activity is facing significant risks in 1Q21 from the increase in the number of people infected. We are forecasting low and relatively stable inflation during 2021–22 and lower interest rates for a prolonged period.

Key points

• Key points:
• Immunization against COVID-19 and the increased risk appetite could lead to the appreciation of the peso to levels of around 19.2 pesos to the dollar by the end of 2021.
• Public debt will stabilize at around 53% in the coming years as long as fiscal reforms are implemented. We are forecasting an Operating Surplus for Banxico of 264 billion pesos (1.1% of GDP).

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