Mexico’s Economy to Take Years to Return to Pre-Pandemic Levels: IMF

The IMF has cautioned that Mexico's economy will take several years to return to pre-pandemic levels of growth, and could experience a

Arslan Butt•Wednesday, October 7, 2020•1 min read

Mexico's Economy to Take Years to Return to Pre-Pandemic Levels: IMF

The IMF has cautioned that Mexico’s economy will take several years to return to pre-pandemic levels of growth, and could experience a severe contraction of 9% this year. To counter this, the organization has highlighted the need for more fiscal and monetary stimulus measures to prop up the economy.

While the IMF has revised its GDP estimates for Mexico higher since the previous forecast for a 10.5% contraction, the coronavirus pandemic has set back economic growth seen over the past decade. The IMF expects the Mexican economy to grow by 3.5% in 2021 and by around 2% in 2022 and beyond.

The IMF observes in its report, “Based on these projections, employment, income and poverty will take several years to return to pre-pandemic levels. Larger temporary near-term fiscal support would alleviate current distress as well as limit lasting economic damage.”

In Q2 2020, the GDP came in at -17.1% QoQ on account of the pandemic and the lockdowns. Mexico’s central bank has forecast a contraction of 12.8% for this year in case the pandemic extends for a longer period of time.

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Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics. His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker. His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.