LatinNews Regional Monitor: Mexico - 06 March 2020

* The Institute of International Finance (IIF), a global association of financial institutions, has urged Mexico to relax its monetary policy while the risk of a global economic recession due to coronavirus (Covid-19) is high. IIF’s Chief Economist Robin Brooks warned that “growth across emerging economies slowed sharply well before Covid-19, with growth grounding to a halt across all components of GDP in Mexico”. The IIF forecasts that global economic growth for 2020 will be around 1%, the lowest rate since the financial crisis, falling from 2.6% in 2019. Emerging economies without a growth buffer, such as Mexico, would be hit particularly hard by a global recession. The IIF highlighted that the US Federal Reserve’s decision to cut interest rates by 50 basis points ensures that loosening monetary policy in Mexico would not weaken the country’s currency too much.

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