Economists at BBVA Research Department revised their GDP growth forecast for Mexico to -10%. They expect Banxico to keep cutting rates, reaching 3% in December. Regarding MXN, they point out it could appreciate if global risk aversion decreases.
Key Quotes:
“We revised down our growth forecast to -10.0% (range from -9.0% to -12.0%), given the stoppage of economic activities caused by COVID-19 and the effects on private investment of the temporary inconsistency derived from economic policy decisions
“Mexico needs countercyclical economic policies and recover investor confidence to better face the challenging environment.”
“We anticipate that the monetary rate will be at 3% in December 2020 and that it will remain at that level during 2021 and 2022.”
“The anticipated gradual decrease in global risk aversion will be reflected in an additional return of the exchange rate to lower depreciation levels of the peso by the end of the year.”
“We predict that public debt (in its broadest concept) will be located at 56.2% of GDP in 2020 vs. 44.7% in 2019.”
Share
