Mexico Economic Outlook. Third quarter 2020

Summary

The road to recovery will be long and bumpy. Mexico needs countercyclical economic policies and to regain investor confidence to better address the challenging environment.

Key points

• Key points:
• We've revised our GDP growth forecast downward to -10.0% (ranging from -9.0% to -12.0%), in the face of the halt of economic activity caused by COVID-19 and the effects that the dynamic inconsistency resulting from economic policy decisions have had on private investment
• We expect the monetary policy rate to decrease to 3% by December 2020 and to remain at that level during 2021 and 2022
• The anticipated gradual decline in global risk aversion will be reflected in an additional return of the exchange rate to levels of lower peso depreciation by the end of the year
• We expect that public debt (in its broadest terms) will be 56.2% of GDP in 2020 versus 44.7% in 2019

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