The Ministry of Finance, in the draft budget for 2021, estimates that in Mexico GDP will grow by 4.6% in Mexico, «a figure that could be adjusted if the availability of a COVID19 vaccine allows for a wide reopening at the beginning of the year».
Last September 1, analysts consulted by the Bank of Mexico adjusted their economic growth forecast for the country from 3% to 2.95%, next year.
In the document on the new budget, the Treasury refers to the expectation of «an average exchange rate of 22.1 pesos per dollar, which assumes a declining trajectory throughout 2021, consistent with economic recovery».
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As for hydrocarbons, it estimates «a prudent price of Mexico’s export oil mixture of 42.1 dpb, in line with its recent evolution and with futures and analyst estimates for WTI and Brent crudes».
In addition, he adds, «a production platform of 1,857 thousand barrels per day is used, which considers the new environment of demand and prices, as well as the renewed emphasis on efficiency in the production and supply of fuels by PEMEX».
In terms of inflation, the Treasury estimates annual inflation by the end of 2021 of 3%, in line with Bank of Mexico’s projections and target.
Also a «4% interest rate, which represents an additional 50 basis points reduction during 2020 and monetary policy stability during 2021».
The Treasury hopes that it will follow the economic revival initiated in the second part of 2020, «as the economic units adapt to the new environment and that the containment of the disease in Mexico and abroad allows the gradual removal of confinement measures and, therefore, greater utilization of installed productive capacity».
Another expectation is that the «T-MEC will empower the integrated sector to the global economy and strategic investment in our country, leveraged in active policies of business attraction and improvement in the rule of law that labour reform means».
The 2021 Economic Package noted, «gives priority to three public policy objectives: to expand and strengthen the capacities of the health system, particularly services geared towards the care of vulnerable groups; promote rapid and sustained revival of employment and economic activity; and continue to reduce inequality and lay the groundwork for balanced and vigorous development in the long run.»
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