Mexico's central bank forecasts "difficult, drawn out" economic recovery

2020-10-09 04:22

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MEXICO CITY, Oct. 8 (Xinhua) -- Mexico's economic recovery will be "difficult and drawn out," and subject to continued uncertainty due to the novel coronavirus (COVID-19) pandemic, the Bank of Mexico (Banxico) said on Thursday.

According to the just published minutes of Banxico's monetary policy meeting on Sept. 24, the bank's five-member governing board believes international financial markets face several risks, such as the November presidential elections in the United States and worsening trade disputes around the world, as well as the ongoing pandemic.

However, "the majority agreed that global financial markets have performed positively in recent weeks, reflecting the impact of measures implemented in advanced economies," the document said.

Regarding Mexico, "the majority indicated the economic recovery will be difficult and drawn out, and added that it is subject to uncertainty."

One of the members of the board said Mexico's period of recovery could last between two and six years or even up to a decade in terms of per capita gross domestic product (GDP).

At the September meeting, the board unanimously agreed to cut the benchmark interest rate for the eleventh time, to 4.25 percent, citing risks to the local economy from a lasting pandemic.

In late August, the central bank forecast the economy would contract between 8.8 percent and 12.8 percent in 2020 due to the pandemic.
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