AMLO’s economy minister less bullish about growth than her boss

February 8, 2022

Economy Minister Clouthier said her forecast is based on the impact of the omicron variant of COVID-19.

The economy is likely to grow 2.6% in 2022, the economy minister said on Monday, in stark contrast to President López Obrador’s much more positive forecast last Wednesday.

Tatiana Clouthier’s prediction is in line with financial experts and the International Monetary Fund (IMF). Experts surveyed by the Bank of México (Banxico) forecast 2.2% growth this year and the International Monetary Fund (IMF) predicted 2.8%.

In response to the IMF and Banxico’s forecasts, the president predicted 5% growth for the next three years. “Five percent [growth for this year] …. the experts and specialists are giving us at most 2.5% and I’m putting forward 5%. I have information and I’m also optimistic … 5% for 2023 and 5% for 2024,” he said.

The last time Mexico achieved two consecutive years of growth over 5% was in 1996-97. Prior to that was in the early 1980s. This year seems a particularly unlikely year to repeat the feat given that the economy entered a technical recession in late 2021.

Clouthier said her lower figure was due to the continued negative impact of the coronavirus omicron variant. “If we remember back a little … the Treasury proposed 4% [growth for 2022]. That was before omicron. Right now, we estimate it could be around 2.5-2.6%,” she said.

Clouthier added that optimism may have inspired the president’s eye-catching prediction. “There are many factors that occur throughout the year that can positively or negatively alter the year. I think the president is betting that positive things will happen.”

The economy achieved 5% growth in 2021. That followed an 8.4% contraction in 2020, while inflation in 2021 soared to 7.36%, the highest level in 21 years.