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LatinNews Daily - 06 January 2021

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In brief: World Bank forecasts modest Mexico growth

* The World Bank (WB) has released its latest Global Economic Prospects report in which it forecasts that Mexico’s GDP will grow by 3.7% in 2021 after contracting by an estimated 9% in 2020. The WB’s 2021 forecast is lower than the 4.6% GDP growth projection in the Mexican government’s 2021 budget. The WB notes that while a return to GDP growth is positive it will be “insufficient to reverse last year’s output losses”. According to the WB, Mexico’s economic growth this year will be driven by projected higher exports to the US, as its economy picks up, and to the dissipation of trade policy uncertainty following the coming into effect of the US-Mexico-Canada Agreement (USMCA) on regional trade. However, the WB says that Mexico’s growth will be “held back by factors including planned fiscal consolidation and long-standing weakness in investment”.