October 06, 20 - 6:18 pm - LABS

New IMF forecast for Mexico’s 2020 GDP is a 9% drop

In a document describing the preliminary conclusions of a recent team visit to Latin America’s second-largest economy, the Internacional Monetary Fund (IMF) disclosed on Monday its forecast for Mexico’s GDP this year, and beyond: an “output growth at –9% in 2020, 3,5%t in 2021, and close to 2% thereafter”.

“Based on these projections, employment, income, and poverty will take several years to return to pre-pandemic levels. Not only are the gains of the past decade in these areas being set back, but Mexico’s long-standing challenge of low growth also appears set to worsen,” wrote the organization.

The main risks for Mexico’s recovery are the possible resurgence of COVID-19 domestically, prolonged disruption in labor markets, renewed global financial volatility, lower oil prices, and adverse growth outcomes in key trading partners. “On the upside, early vaccine availability, advanced economy buoyancy benefiting from large policy interventions, and faster-than-expected re-absorption of workers into the labor force could boost confidence and growth,” said the IMF.

In total, Mexico has lost over 75,000 lives due to the coronavirus pandemic; and around 12 million workers lost their jobs.

Mexico City skyline. Photo: Shutterstock

A more complete forecast for all the main economies is set to be published by the IMF next week.