It could slow down the national economy and restrictions could return.
The increase in infections of omicron, the new variant of covid-19, casts doubt on Mexico's economic recovery, which in recent months has shown weakness. Experts agreed that the implications of the fourth wave of coronavirus cases on economic activity will consist of a new interruption in the supply chain, restrictions on social activities that will especially affect the service sector and upward pressure on prices. According to the latest Citibamamex survey data, expectations for Gross Domestic Product (GDP) growth in 2022 are 2.8 percent and 2.2 percent for 2023. The Ministry of Health announced that 282.8 million confirmed cases have been reported worldwide, of which 1.6 million are new.
In Mexico, 3.9 million total cases have been confirmed and 299,000 total deaths due to covid-19. Our basic scenario contemplates a fourth wave in the first quarter of 2022, with new red traffic light implementations in several cities, although we do not foresee a confinement like the one that occurred in 2020, and together with a weak economy we would have very low or negative growth at the beginning of 2022, and together with a weak economy we would have very low or negative growth at the beginning of the following year," said Ernesto O'Farril, president of Grupo Bursametrica. "I affirm that the fourth wave of contagions will break the inertia of the recovery. GDP in the first quarter of next year could register between 0.5 and minus 0.5 percent at an annual rate, and with this result it will be difficult to reach the 3 percent that the market is projecting. Even our forecast has been lowered to 1.9 percent in 2022, that is, it is almost one point of GDP what a fourth wave would represent in the economy". However, experts affirm that the impact would be marginal, especially due to the position taken by the government and the authorities who have announced that there will be no shutdown of activities as we observed last year.