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Analysts at Wells Fargo point out Mexico is still struggling with COVID spread. They see few signs of a meaningful fiscal stimulus on the way and consider the Mexican economy may not see as much of a rebound in economic growth during the second half of the year. 

Key Quotes: 

“Unfortunately, not all economies are on the upswing. Mexico’s economy remains in a difficult place as the country grapples with its still-robust spread of COVID-19. Industrial production in Mexico was down 16.7% year-over-year in June, compared to 10.8% in the United States. And in July, the manufacturing PMI for Mexico registered a 40.4 reading, up just a bit from 38.6 in June and still firmly in contractionary territory.”

“We have long maintained that countries with the fiscal capacity, capital markets access and political will to float their economies through the COVID-19 would have a major leg up, and Mexico’s experience thus far is a prime example of how a country without
these ingredients may struggle mightily when dealing with the economic fallout from COVID-19.”

“Our latest forecast has downgraded real GDP growth for Mexico for both 2020 and 2021. If realized, Mexican real GDP would contract in three consecutive years from 2019-2021.”