LatinNews Daily - 28 August 2020

* Mexico’s central bank (Banxico) has released minutes of a meeting held by its board of directors, which warn that the government’s “public policies are not conducive to stimulating private investment”, and of the “absence of a counter-cyclical fiscal policy to support the productive sector”. The meeting, which took place on 12 August, resulted in Banxico’s decision to reduce its benchmark interest rate by 50 basis points, from 5% to 4.5% - the fifth consecutive cut in the interest rate in as many months. The minutes from the meeting warn that these factors could “cause more long-lasting damage to the productive apparatus”, and that the “implications for potential growth could be considerable, particularly given the contraction in investment, which fell 16% from July 2018 to March 2020, and an additional 32% in the following two months”. The report highlights the need to put into place combined actions focused on increasing productivity, and follows the latest GDP figures, which revealed a historic contraction of the country’s economy in the second quarter of 2020.

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