LatinNews Daily - 26 March 2020

* A new report by the Mexican branch of BBVA bank on the impact of coronavirus (Covid-19) on the country’s economy warns that “inaction is more dangerous than over-reaction, both for public health as well as the economy”, and that due to “current uncertainty”, it forecasts a 4.5% contraction in Mexico’s GDP in 2020. The bank recommends that the federal government led by President Andrés Manuel López Obrador (which has faced criticism over its response to Covid-19) employs strong measures to contain the virus, including social distancing and widespread testing, even for those who are not showing symptoms, as the less the virus spreads, the smaller the impact on the economy. BBVA predicts a fall in remittances in 2020 due to rising unemployment rates in the US. BBVA also predicts a sharp decline in exports due to a global collapse in demand, and due to disruptions in value chains. Construction will be affected by a collapse in the demand for housing and mortgages, which will also undermine industrial production.

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