Mexico | The economy is stagnant; recovery suspended

Summary

After the deep economic contraction that Mexico experienced in the second quarter of 2020, a recovery process began in the third quarter of that year that continued until the second of last year.

Key points

• Key points:
• There has been a lot of debate about whether the country's economy went into recession or not. There is no clear answer as there is no precise definition of what constitutes a recession.
• There are several factors that explain this poorer relative performance. First, Mexico is more negatively affected by bottlenecks in global supply chains as it is a country with a high manufacturing vocation.
• Second, the decision not to have countercyclical fiscal impulses to lessen the impact of the crisis, as a large number of countries did.
• Third, the health response to the contingency was not optimal, which resulted in Mexico being one of the countries with the highest number of excess deaths on the planet.

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