There is even potential to expand gross domestic product (GDP) by up to 7 percent, the governor of Banxico, Alejandro Diaz de Leon, said while presenting the bank's Quarterly Inflation Report for the first quarter of the year.
However, that would depend on the pace and effectiveness of the immunization campaign, and on continued favorable global financial conditions, among other factors, said Diaz.
"Although risks remain around the pandemic, it has been gradually subsiding in the country and progress has been made on the vaccination campaign, which has led to the relaxation of implemented restrictions," Diaz added during a virtual presentation.
The U.S. government's sizeable fiscal stimulus plan will also help drive Mexico's recovery, as the two economies are closely linked through trade.
Banxico expects the recovery to slow somewhat in 2022, and downgraded its forecast from 3.3 percent to 3 percent.
Inflation is expected to reach 4.8 percent by the end of 2021, higher than the 3.6 percent forecast in the bank's previous report.
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