IMF Adjusted Forecast Says Mexico Will Grow 1 Percent This Year
The International Monetary Fund’s (IMF) original 1.3 percent growth forecast for Mexico in 2020 has been reduced to 1 percent.
The IMF said that weakened investment into the country was the main reason behind the forecast readjustment. The projections were disclosed during the opening of the World Economic Forum in the Swiss resort of Davos where the international body also trimmed its forecasts for global economic growth in 2020. Sharper than expected slowdowns in India and in other emerging markets were the main reasons for the reduction.
The projected 1 percent rate is a drop from the 1.3 percent growth rate that was forecast in October last year. Despite the growth rate reduction for 2020, the IMF this month reported an expected growth rate of 1.6 percent growth for Mexico for 2021.
Expectations of recoveries in large emerging economies such as Brazil, India, Mexico, Turkey and Russia had raised hopes of improved growth in 2020. However, the IMF estimates it is unlikely for those countries to make up for lost ground and recover the strong growth levels of recent years.
As always, Latin America will be to be hit by the mixed fortunes of Mexico and Brazil. The IMF now expects a 1.6 percent growth rate for the region this year and 2.3 percent for 2021; last October those figures were 1.8 and 2.4 respectively.
According to the IMF’s new estimates, China will be the most dynamic economy of the G20 with 5.8 percent growth. The US economy (Mexico’s biggest business partner) saw a 0.1 percent reduction in growth, falling to 2 percent this year, while a 1.7 percent rate is expected for 2021.
The IMF also reported global growth would reach 3.3 percent in 2020, compared to 2.9 percent in 2019, which was the slowest pace since the 2008 financial crisis. Estimates for both years were trimmed by 0.1 percentage point from October’s forecasts.