Barely a third of the Mexican states will resume the level of their gross domestic product (GDP) pre-pandemic at the end of 2022, leaving the rest of the territory “still in the process of incomplete recovery,” BBVA Mexico estimated this Wednesday.
When presenting the most recent report “Mexico Regional-Sectoral Situation”, Carlos Serrano, chief economist of BBVA Mexico, warned that the growth of the Mexican economy will be “modest”, driven mainly by the tertiary sector, services and tourism.
However, it considered that the rest of the entities will reach their levels of GDP of 2019, prior to the covid-19 pandemic, at the end of 2023.
The entities that would resume their level of GDP 2019 will be Tabasco, Baja California, Chiapas, Nayarit, Oaxaca, State of Mexico, Chihuahua, Yucatán, Zacatecas, Sonora, Durango, Nuevo León and Jalisco.
The report adds that only Mexico City remains behind with a negative outlook of 1.0% by the end of 2022, among the entities with the greatest weight in the Mexican GDP“due to the poor performance of the business support sector and the slow recovery of financial services.”
In contrast, the BBVA Mexico study highlights that Quintana Roo and Baja California Sur will be among the lagging entities despite their expectations of positive growth for 2022, explained by the lag in the recovery of the accommodation sector.
Our growth perspective in 2022 is positive for almost all the states, in line with the growth perspective of the national GDP of 2.0%”,
Serrano commented.
For his part, the chief economist of BBVA explained that manufacturing and the sectors most related to these, such as wholesale trade and transport, will be more affected by the slowdown in the economy forecast for the following year.
However, he highlighted that most sectors of the tertiary sector are expected to grow in 2023, highlighting the accommodation and mass media segments.
Services will grow as consumption is maintained, so employment stability will be key”,
highlighted in his presentation.
In turn, Diego López, senior economist at the BBVA Mexicocommented that the Latin American country has real opportunities to attract investment through the repositioning of global supply chains.
López stressed that Mexico can compete against China and take advantage of the trade war that the US government has been waging since 2018, especially in heavy manufacturing.
Likewise, he estimated that the sectors of opportunity for Mexico are transportation services and medical tourism, as well as taking advantage of the railway infrastructure to connect the south with the Mexican north.
For his part, Homero Martínez, also a senior economist at the BBVA Mexicoinsisted that the country has the potential to attract a greater volume of investment and predicted that Mexico would have grown 1.8% more per year since 2018 if it had taken advantage of the capital flight in China due to the disruption of its chains with the US.
He explained that other countries, adjacent to China, such as Vietnam, have been the ones that have been able to take advantage of the “relocation” caused by this trade war and, later, by the pandemic and the war between Russia and Ukraine.
If it had had a policy of attracting and attracting manufacturing since the start of the trade war between China and the United States, the Mexican economy would present a more favorable outlook. It would have translated at least as a positive average annual growth during the last 4 years”,
concluded.
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