Mexico’s economy likely to be another COVID-19 victim

Mexico’s economy likely to be another COVID-19 victim
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Economic forecasters and analysts are predicting that affects of the COVID-19 coronavirus will add momentum to an economic slowdown in Mexico that appears to have been underway since the second half of 2019.

Global banking firm Credit Suisse has “sharply lowered” its forecast for Mexico’s GDP prospects, according to a late March Reuters report.

Citing the spread of the coronavirus and likely reactions to it, the bank says it expects 4.0 percent economic contraction in Mexico’s GDP in 2020. That was down from a previous prediction of 0.7 percent GDP growth, according to Reuters.

The same report indicates Mexico’s GPD shrank by 0.1 percent in 2019, stemming in part from uncertainty about how newly elected president Manuel Lopez Obrador would manage the economy.

The same Credit Suisse analysis says the GDP figure could improve if Obrador focuses less on hitting an annual government budget surplus target in 2020, and if the nation lowers its central bank’s interest rate.

Economics professor Valeria Moy of policy think tank México says forecasters nearly across the board have an “uninspiring short-term outlook for Mexico.”

Writing on the Americas Quarterly website, Moy conditions in his nation are especially disappointing when compared to a “potential GDP” figure designed to measure “the level of output an economy can produce” when a country efficiently uses its labor force and capital.

Writes Moy, “The difference between the potential output and observed GDP is referred to as the output gap.” She cites the Obrador administration as one culprit, writing that it “has made several decisions that tamper with the construction of a more dynamic economy.”

One victim of Mexico’s slowdown in early has been its steel industry. In the first two months of 2020 the nation’s mills produced 2.77 million metric tons of finished or semi-finished steel.

That figure is down by 16 percent from the nearly 3.3 million metric tons produced in the first two months of 2019.

Among sizable nations with multiple steelmaking facilities, it was one of the largest percentage year-on-year drops, along with: Spain (-36 percent); South Africa (-27 percent) and Poland (-23 percent).

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Source: Recycling Today
Mexico’s economy likely to be another COVID-19 victim
<![CDATA[Economic forecasters and analysts are predicting that affects of the COVID-19 coronavirus will add momentum to an economic slowdown in Mexico that appears to have been underway since the second half of 2019.Global banking firm Credit Suisse has “sharply lowered” its forecast for Mexico’s GDP prospects, according to a late March Reuters report.Citing the spread of the coronavirus and likely reactions to it, the bank says it expects 4.0 percent economic contraction in Mexico’s GDP in 2020. That was down from a previous prediction of 0.7 percent GDP growth, according to Reuters.The same report indicates Mexico’s GPD shrank by 0.1 percent in 2019, stemming in part from uncertainty about how newly elected president Manuel Lopez Obrador would manage the economy.The same Credit Suisse analysis says the GDP figure could improve if Obrador focuses less on hitting an annual government budget surplus target in 2020, and if the nation lowers its central bank’s interest rate.Economics professor Valeria Moy of policy think tank México says forecasters nearly across the board have an “uninspiring short-term outlook for Mexico.”Writing on the Americas Quarterly website, Moy conditions in his nation are especially disappointing when compared to a “potential GDP” figure designed to measure “the level…