Mexican economy to contract by 6% in 2020, the World Bank forecasts

Amid the spread of COVID-19 , the collapse of oil prices , and a mild recession , Mexico is going through a difficult financial time.

The World Bank has issued a new report titled “The Economy in the Time of COVID-19,” which explores the difficulties the countries will face during the pandemic .

Mexico

, Latin American’s second-biggest economy , will experience a 6% contraction this year, following a 0.1% decline in 2019. However, the World Bank expects the Mexican econom y to expand 2.5% in both 2021 and 2022.

According to the report, Mexico’s economy will face a “significant contraction” in 2020, as a result of COVID-19.

However, Mexico is also expected to recover in 2021 and 2022, especially if the U.S. economy recovers as quickly as expected.

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The economic organization predicts Mexico will continue adhering to prudent fiscal measures even when revenue performance will deteriorate in 2020.

Moreover, the country is expected to continue prioritizing healthcare and welfare programs aimed at the elderly, disabled, and students.

Despite the efforts launched by the Mexican government, the “slowdown in economic activity is expected to lead to an increase in monetary poverty in 2020.” The negative economic prospect will be worsened since employment is likely to decline, which will force people into the informal sector or unemployment .

The World Bank predicts the economic crisis sparked by COVID-19 will impact employment , income and result in lower consumption rates, slowing down the recovery process.

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