The country closes 2020 with an economic contraction of 9% but market specialists hope for a recovery of 4.1% in 2021
Alfonso Cadena, Executive Director of Economic Analysis from Banorte, financial group, and Mexican holding of banking and financial trades, which is among the four largest companies that provide bank services in the country. Cadena gave Agribrasilis his economical view about the end of 2020, a year extremely affected by the global crisis resulting from the spread of coronavirus, and its prospects for the resumption of Mexican economic growth process in the post pandemic.
AgriBrasilis – The economy has suffered setbacks over the last decades. What was the impact of the Covid-19 effects?
Alfonso Cadena – The coronavirus pandemics has caused the worst economic crisis since the Great Depression of 1929. Mexico has not been an exception, facing the worst recession over the last 90 years.
AgriBrasilis – What is the performance of each sector of the economy?
Alfonso Cadena – The serious health crisis caused a strong impact in virtually every sector of the economy. It all started as a supply shock stemmed from the interruption of the global supply chain due to China’s closings and quarantine.
Subsequently, a demand shock was also observed when the virus spread over the rest of the world, forcing governments into implementing significant measures of mobility restrictions which affected the economical activity as a whole, and had an adverse effect on families, companies and governments income. To counteract this situation, there was a significant reaction from economic policy, both from central banks (monetary stimulus) and from governments (fiscal stimulus).
AgriBrasilis – During the pandemic, were the interest rates effective in stabilizing the inflation?
Alfonso Cadena – The monetary policy has been more focused on providing adequate conditions to an economical recovery in 2020, but without putting at risk the inflation goals that each central bank of the world has.
AgriBrasilis – What are the economical recovery perspectives for after the pandemics?
Alfonso Cadena – We estimate a contraction of 9% for the mexican economy in 2020 and a recovery of 4.1% in 2021.
AgriBrasilis – Is credit being made available to companies and to what extent?
Alfonso Cadena – Among the economic policy mechanisms to counteract the adverse effects of the pandemic, both the Bank of Mexico and the federal government have announced throughout 2020 several facilities to improve access and credit conditions for companies.