The Mexican economy might not recover until 2024, and the states that depend on tourism will take the longest to recover.
According to Carlos Serrano, Chief Economist at BBVA Mexico, without taking into account the fact that 2019 closed with a slight downturn, the Mexican economy could return to levels seen in 2018 by 2023 or 2024.
In addition, the states that are expected to take the longest to recover are Baja California and Quintana Roo, due to their high dependence on tourism and the fact that these states have seen a higher drop in employment. The states in the Bajío region and Northern Mexico are expected to lead the economic recovery, due to their orientation towards manufacturing and exports.
The manufacturing and export industry may benefit from the recovery of the manufacturing sector in the United States, the entry into force of the United States-Mexico-Canada Agreement, and China’s loss of competitiveness due to its trade tensions with the United States.
According to the Mexico Regional Sectoral Outlook from BBVA, manufacturing dropped by 16% in the second quarter of the year. In addition, it specified that the leisure and accommodation sectors will see the worst impacts this year with a 20% drop in each sector, followed by construction with a 19% drop, and wholesale trade with an 18% drop, while mining will grow 1% and health will be up 0.8% as a result of the COVID-19 pandemic.
BBVA indicated that the federal government has the opportunity to get back on track through a counter-cyclical fiscal policy to lessen the impact of the economic crisis, which is why Carlos Serrano believes that a fiscal space must be built to ensure a decreased deterioration of the country’s productive capacity, and a faster economic recovery.
Oradel Industrial Center contributes to the economic growth in Mexico by attracting international manufacturing and logistics operations to Mexico. Oradel Industrial Center is located in Nuevo Laredo, Tamaulipas on the Texas-Mexico border, only 10 miles from the International Bridge. It offers competitive advantages for companies seeking to establish their manufacturing and logistics operations. The industrial park has all the services and infrastructure( gas, water, electricity, rail services etc.) it also offers inventory and “buil to suit” industrial buildings.