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LatinNews Daily - 26 February 2021

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In brief: Mexico’s Banxico warns of further uncertainty

* Mexico’s central bank (Banxico) has released the minutes of a meeting of its board of directors, which warns of further uncertainty and risks to economic activity due mainly to the evolution of the coronavirus (Covid-19) pandemic. The minutes were from a meeting which took place on 11 February which produced the decision to cut the benchmark interest rate by 25 basis points, from 4.25% to 4%. The board highlights that the number of infections and monthly deaths from the pandemic peaked in January, but “there are no signs that this trajectory is going to change soon”. It also highlighted that it will take time to achieve the percentage of vaccination coverage necessary to return to normality, warning that due to the scarcity of vaccine doses and logistical problems in distribution, in the best case scenario, the impact would continue to be felt at the end of the year, which could result in “irreversible damage to many companies”. The board forecasts that “in an optimistic scenario” Mexico’s GDP would grow 6% in 2021. The same day Mexico’s national statistics institute (Inegi) confirmed that Mexico’s GDP contracted by 8.2% in 2020.