COVID-19 Wreaks Financial Chaos

COVID-19 continues to lay waste to economies around the world. As the fallout of the virus becomes ever clearer, other concerns are being unearthed. Among them is the future of young people and their prospects. Another is the Afores problem. The future of digital banking is also being considered. All this and more, in this week’s finance news.

Mexico Granted US$1 Billion from World Bank

Mexico was granted a US$1 billion development loan from the World Bank, which according to Deputy Minister of Finance Gabriel Yorio, will be used to improve the financial inclusion of 15-17-year-olds. While this comes as good news, the outlook on financial health among young people grows darker in Mexico by the day. COVID-19 will cost the country 1 million jobs, says President Andrés Manuel López Obrador. The majority of those will be felt among young people.

Digital Banking’s Time to Shine?

Banking in Mexico has low penetration within the population. The vast majority of Mexicans that use banks do so in the traditional style: entering branches to talk to assistants. But with COVID-19, this ritual has been complicated. Considering the restrictions that the local Mexico City government announced ahead of this week’s bank reopenings, could online be the best bet for many?

Afores Found Wanting

The government’s intentions for the Afores system in Mexico has resulted in a great deal of criticism. Yet, experts and industry insiders freely admit that the Afores system needs reforms of various kinds. There is no right answer, but allowing those who have recently lost their jobs access retirement funds looks like it could lead to problems in the future.

Banks Predict Dour Result for Mexico’s National Debt

COVID-19’s impact on the Mexican economy could be such that in a single year, national debt grows more than it did in the entire previous government administration, suggest possible forecasts from BBVA and CitiBanamex.