![]() In any case, after doing the respective math, the finance ministryĬoncluded that the potential GDP growth for 2019 was 2.4%, and it wasĮxactly the same for 2020. Sample it considered to a 28-year window of 1996 to 2024. ![]() For the 2020 budget, the Ministry of Finance enlarged the In theĮconomic criteria used for the 2019 budget, it considered 19 years, fromĢ003 to 2022. I highlight with italics “ at least” and “ maximum”īecause the Ministry of Finance sometimes changes the sample. Of Finance calculates potential GDP using two main sources: i) theĬompound annual rate of observed real GDP growth for at least the 10 years prior and ii) the compound annual rate of estimated real GDP growth for a maximum of 5 years in the future. It’s true that potential GDP is a theoretical number, but it isĬarefully calculated using statistical models. AnĮxample of this was Brazil a decade ago, which briefly grew at a 7%Īnnual rate but suffered problems for years afterward. Rate than its potential, but this usually causes “overheating” in theĮconomy with symptoms including high inflation and other distortions. A country’s economy can temporarily grow at a faster Theĭifference between the potential output and observed GDP is referred toĪs the output gap. It depends on a number ofįactors, including a country’s capital stock, the labor force and theĮfficiency of the latter, which we can refer to as human capital. The OECD defines potential GDP as the level of output that an economyĬan produce at a constant inflation rate. Predicted that Mexico would average 4% growth on his watch. President Andrés Manuel López Obrador, who prior to taking office These would obviously be huge disappointments for The expectation for global growth from 2.9% to 2.4% and that of Mexicoįrom 1.2% to 0.7% for this year and to 1.4% for 2021, from a previousĮstimate of 1.6%. The OECD has just presented its forecasts, cutting ![]() The uninspiring short-term outlook for Mexico is nearly unanimousĪmong forecasters. That’s highlyĭisconcerting in an economy that has already been notorious for slow Unhealthy distortions – seems to be falling as well. Longer term: Our “potential GDP” – a term used by economists toĬalculate how fast an economy can grow over time without producing Produced its first confirmed cases on Mexican soil last week.īut there is reason to be even more worried about Mexico in the Impact of the Covid-19 epidemic, which is spreading globally and Meanwhile, economists are racing to calculate the economic In fact, GDPĪctually decreased 0.5% on an annual basis during the final quarter of Recently learned our economy did not grow at all in 2019. CITY – This year has already brought a wave of bad news for Mexico.
0 Comments
Leave a Reply. |