LatinNews Daily - 19 May 2020

* International credit ratings agency Fitch has predicted that Mexico’s “modest” fiscal response to the fallout of the coronavirus (Covid-19) pandemic could “contribute to an especially deep recession”. In a statement on Latin American sovereigns, Fitch highlighted that Mexico’s fiscal package to combat the pandemic and its impacts is worth just 0.7% of GDP, far below the value of stimulus packages adopted by Brazil (14% of GDP) or Chile and Peru (7%-8% of GDP). Back in April, Fitch downgraded Mexico’s Long-Term Foreign Currency Issuer Default Rating (IDR) from ‘BBB’ to ‘BBB-’, stating that the government’s debt ratio is likely to rise six percentage points to over 50% of GDP, its highest level since the 1980s, due to the economic impact of the pandemic.

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