Mexico's GDP to Contract by 9.3 Percent in 2020

Mexico’s central bank seems more optimistic about the economy than it was three months ago. In its quarterly report released on Wednesday, Banxico said it expects GDP to fall from 8.7 percent to 9.3 percent. In its July-September report, the bank forecast a drop of between 8.8 percent and 12.8 percent.

“An environment of high uncertainty is still associated with the evolution, both globally and nationally, of the pandemic, while restrictions on operations in different sectors remain. In particular, new outbreaks in several economies and the absence of an effective treatment or available vaccine have prolonged the duration of the health emergency compared to initial estimates,” Banxico stated in its report. 

The bank, led by Alejandro Díaz de León, added that recovery will be slow due to "the expiration of fiscal stimuli in various countries or a worsening of the pandemic.” As for the labor market, Banxico estimates a loss of 700,000 to 850,000 jobs registered at IMSS. By October, this figure stands at 518,609. 

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• DiDi Pay is now in Mexico. But what benefits does this solution offer to drivers and partners of the Chinese company?. “We are working on several partnerships that we hope will come to fruition by the end of this year and in early 2021. Our partners are reliable; that is what we are looking for. In return, we offer our partners larger and more stable sales volumes,” Andrea Picardi, General Manager of DiDi Pay Mexico, told MBN this week.

• The US elections have led to different forecasts on their impact on Mexico. Little has been said about the impact on the entrepreneurial system, however. “Traditionally, capital has been one of the main problems when it comes to the startup and small-business ecosystem in Mexico. Finally, US and other foreign venture capital firms are taking notice of Mexico’s market opportunity,” Nick Grassi, COO and Co-Founder of Finerio Connect, wrote in an article for MBN. 

• A recent G20 meeting addressed the strategies needed to boost global economic recovery. The first step was to establish a new agreement focused on governments’ debts, a decision made to help smaller countries with their economic burden to prevent them from requesting more financing to pay another debt. More details here. 

• PEMEX has asked Banxico to use a portion of its international reserves to pay its oil debt. However, the central bank said this proposal is not feasible. In November, international reserves totaled US$194.361 billion, reported El Economista.