Mexico's economy to shrink 9.8 pct in 2020, say private-sector analysts

Xinhua
02 Oct 2020, 06:59 GMT+10

MEXICO CITY, Oct. 1 (Xinhua) -- Private-sector financial analysts in Mexico forecast the economy will contract 9.8 percent in 2020, slightly less than the 9.9 percent contraction they forecast in August, the central Bank of Mexico (Banxico) said on Thursday.

For 2021, analysts project gross domestic product (GDP) will expand 3.2 percent, higher than the 2.95 percent previously forecast, according to Banxico's survey of 37 economic analysis and consulting groups from Sept. 24 to 29.

Latin America's second largest economy, after Brazil, contracted 0.3 percent in 2019, its first negative growth in a decade, but experts expect a bigger drop this year due to the impact of the novel coronavirus (COVID-19) pandemic.

Inflation is expected to register 3.86 percent at the end of this year, slightly higher than the 3.82 percent projected in August, while 2021 is forecast to see 3.55 percent inflation, down from the 3.56 percent previously projected.

Mexico ended 2019 with inflation at 2.83 percent, its lowest level since the end of 2016 and its second lowest level on record.

Banxico has an inflation target of 3 percent, with a one-point margin of error up or down.

Regarding the national currency, the experts consulted by Banxico projected an exchange rate of 22 pesos to the U.S. dollar by the end of 2020, lower than the 22.6 pesos estimated in August.

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