Sun. Apr 5th, 2020

Governor of the Bank of Mexico expects economic slowdown due to coronavirus

The governor of the Bank of Mexico, Alejandro Díaz de León, said on Thursday the Wuhan coronavirus as one of the risk reasons why the Mexican central bank has decided to reduce the growth prospects of the Latin American country in 2020.

“Clearly, the outbreak of the coronavirus has been very important in recent weeks,” said the governor, listing the risks that are generating uncertainty in the markets and that led the Bank of Mexico on Wednesday to reduce growth expectations for Mexico from a range between 0.8% and 1.8% to one between 0.5% and 1.5%.

Although they have not yet been detected infected by the virus in Mexico, Díaz de León foresaw “a weaker global economy associated with the coronavirus outbreak.”

“It is going to spread before we have a remedy to attack this virus,” said the governor, during an event with bankers in Mexico City, speaking of the pandemic originated last December in Wuhan, China, where so far 2,744 people have died and 78,497 have been confirmed as infected.

The coronavirus has spread, in addition to its origin in China, to many other countries such as South Korea, Japan, Italy, Iran, France, Germany, Spain, Croatia, the United States and now also to Latin America, in Brazil.

“It is something that is going to be developed daily. We will see what is being done,” he said of the authorities’ efforts to stop this epidemic, which he defined as “unknown territory.”

The governor of the Bank of Mexico recalled that the AH1N1 virus crisis in 2009 had “very severe effects on the Mexican economy.”

It is estimated that about 8,000 infected people died in Mexico, a country that canceled public events and closed schools and businesses for several weeks.

A cruise ship with 4,500 passengers and about 1,500 crew members is in the landing position from its arrival to the Mexican island of Cozumel on Wednesday night, after discarding a case of Wuhan coronavirus from one of the ship’s workers, who would have a common flu .

However, passengers have not yet been able to descend as the relevant medical tests are being carried out.

In addition to the outbreak of the Wuhan coronavirus, the cause of the COVID-19 disease, the governor pointed out as a factor of uncertainty the possibility that trade tensions between the United States and China will rise in mid-2020.

While he welcomed the entry into force of the T-MEC trade agreement between Mexico, the United States and Canada, which will offer “great opportunities” for the Mexican economy.

Mexico’s gross domestic product (GDP) fell 0.1% in 2019 compared to the previous year due to the contraction of industrial activity.


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