Mexican economy facing "high degree of uncertainty" due to COVID-19, says Banxico

Source: Xinhua| 2020-08-27 12:38:07|Editor: huaxia

MEXICO CITY, Aug. 26 (Xinhua) -- Mexico's economy is facing a "high degree of uncertainty" as it is still difficult to predict the duration of the COVID-19 pandemic and the impact that the virus containment measures will have, Banxico, the central bank of Mexico, said in a report on Wednesday.

"The evolution of the COVID-19 pandemic is still in progress both globally and nationally, so a high degree of uncertainty persists in any projection of economic activity in Mexico," the bank stated in its inflation report for the second quarter.

The bank provided three possible scenarios for the economy's performance in 2020.

In a deep U-shaped scenario, Mexico's economy will contract by 12.8 percent in 2020, greater than a drop of 8.3 percent predicted previously.

In a deep V-shaped scenario, the economy will shrink 11.3 percent, also greater than a fall of 8.8 percent forecasted earlier.

Finally, in a V-shaped scenario, the economy will contract by 8.8 percent, greater than the 4.6 percent decline predicted before.

The Banxico report stated, however, that Mexico's economy could grow between 1.3 percent and 5.6 percent in 2021.

"It is necessary to emphasize that there is a prevailing risk that economic activity could present lower or higher trajectories than those described," Banxico added.

"As more information becomes available on the dynamics of the pandemic itself and its effects on economic activity, it will be possible to determine what type of scenario will materialize," it stated.

As of Tuesday, Mexico had reported 61,450 deaths and 568,621 confirmed cases of COVID-19 since the virus was first detected in the country on Feb. 28, according to the Mexican Ministry of Health. Enditem