There are five key headwinds to Mexico’s economy, including high inflation and shortages in the auto sector, which suggest to us that the recovery will disappoint expectations from here. We now forecast below-consensus GDP growth of 6.0% in 2021 and 2.8% in 2022 (previously 6.5% and 3.5%). This feeds into our view that Banxico will end its tightening cycle sooner than investors currently anticipate.
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