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LatinNews Daily - 15 January 2021

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In brief: Mexican gov’t ready to deal with long-term economic crisis

*Mexico’s finance minister, Arturo Herrera, has said that the government is prepared to deal with an extended economic crisis produced by the coronavirus (Covid-19) pandemic. In a radio interview, Herrera said the finance ministry (SHCP) is working on the hypothesis that the economic and public health emergency produced by Covid-19 could last for another 18 months and it has prepared for this. Herrera said that this is why the SHCP has not offered tax breaks to firms and instead concentrated on providing debt relief and financial support for the most vulnerable sectors; and on ensuring that Mexico has enough funds available to buy Covid-19 vaccines. Herrera also dismissed the possibility that Mexico could launch a major economic stimulus package similar to the US$1.9trn plan recently announced by the US. Herrera argued that Mexico does not have the ability to contract debt at such low interest rates as the US. “If we had incurred debt of 20% or 30% of GDP it would have cost us an additional M$400bn [US$20.1bn]”, Herrera said.