Mexico's economy went into a technical recession at the end of last year, with two consecutive quarters of decline despite annual growth of 5% for 2021.
The global supply chain has continued to be a challenge for Mexican assembly plants. Additionally, despite COVID-19 infections declining in late 2021 and there being few health-related limitations, the economy continued to struggle. Alfredo Coutiño, Latin America director at Moody’s Analytics, stated:
“The weakness of domestic production capacity has to do more with the structural damage caused by the pandemic and the lack of mitigation policies to help restore the level of productive investment."
According to the National Institute of Statistics and Geography, in the final quarter of 2021, economic output decreased 0.1% versus the previous three months, when it shrank 0.4%.
Coutiño explained that the slowing in the second half of last year might have an influence on growth in 2022, noting that government regulation to restrict competition is stifling private investment.
The Mexican economy expanded by 5% in 2021, up from 8.4% the previous year when the coronavirus pandemic swept through Mexico.
Moreover, according to the International Monetary Fund, Mexico's economy will expand 2.8% this year, while other experts predict 2.7%.
Mexico Treasury Secretary Gabriel Yorio summed it up last week when he said that the economy would continue to feel the effects of COVID-19 in 2022.