Financial analysts have downgraded Mexico’s growth forecast for 2020, from -7.99 percent in May to -8.80 percent in June, the Bank of Mexico (Banxico) said on Wednesday.
It was the fourth growth forecast by private sector economists since Mexico reported its first case of novel coronavirus infection on Feb. 28, which led to lockdown measures that brought the economy to a standstill.
For 2021, analysts forecast a 2.8 percent expansion in GDP, higher than the 2.20 percent previously forecast, according to the central bank’s survey of 35 financial institutes between June 24 and 29.
Latin America’s second-largest economy after Brazil, Mexico saw its GDP contract 0.3 percent in 2019, the first time it dipped to negative numbers in a decade.
The inflation forecast went from 3.07 to 3.34 percent by the end of the year, and from 3.45 to 3.51 percent for the end of 2021.
Mexico closed 2019 with inflation at 2.83 percent, the lowest level since the end of 2016 and the second-lowest level since records have been kept.
Banxico’s inflation target is 3 percent, allowing for a one-percent variation up or down.
The national currency is expected to trade at 22.66 pesos to the U.S. dollar at the end of 2020, less than the 23.02 projected last month.
The peso fluctuated more in March and April, mainly due to global oil market jitters and the impact of the COVID-19 pandemic on the world economy.
The peso has stabilized in recent weeks, and it is trading for around 23 pesos to one U.S. dollar.