Economy & Business - December 2021

ECONOMIC HIGHLIGHTS

MEXICO | New IMF credit line approved. On 19 November the International Monetary Fund (IMF) approved a US$50bn successor two-year flexible credit line (FCL) for Mexico, designed for crisis prevention. An IMF press release notes that this is Mexico’s ninth FCL arrangement with the IMF since 2009. The most recent of these, approved in November 2019, was for US$61bn. The IMF highlights that as with all their FCL arrangements to date, the Mexican authorities “stated their intention to treat this new arrangement as precautionary”. It adds that in recent years, Mexico “has been on a path of gradually reducing access under its FCL arrangements, and the new arrangement continues on this path”. According to the IMF, the Mexican economy is “rebounding from its deepest recession in decades, spurred by strong US growth” and rising rates of vaccination against the coronavirus (Covid-19). It notes that the authorities “have successfully maintained external, financial, and fiscal stability, despite the pandemic-related challenges”. Yet it warns that the Mexican economy remains “exposed to external risks, including from renewed waves of the Covid-19 pandemic, as well as international financial volatility, for instance, from a rise in inflation expectations in advanced economies and a corresponding faster-than-expected normalisation of their monetary policies”.

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