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LatinNews Daily - 14 January 2021

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In brief: BofA economist warns on Mexico

* Carlos Capistrán, chief economist for Mexico and Canada at US multinational investment bank and financial services holding company Bank of America (BofA), has warned that the elimination of autonomous government entities, as Mexico’s President Andrés Manuel López Obrador has recently proposed, could affect Mexico’s credit ratings and accelerate the process of it losing its investment grade, among other factors such as rising public debt. Speaking on Spanish-language business news channel El Financiero-Bloomberg TV, Capistrán said BofA is forecasting that Mexico’s GDP would grow 3% this year after contracting between 8%-9% in 2020 as a result of the coronavirus (Covid-19) pandemic. Last July BofA issued a report warning that Mexico could lose its investment grade in 2021, citing factors such as the fact that its structural fiscal deficit will only be exacerbated by the sharp contraction in GDP in 2020. It added that the limited economic stimulus measures adopted by the Mexican government mean that a swift economic recovery is unlikely.