Just last week, Bank of America Merrill Lynch (BofAML), one of the three largest bank holding companies in the United States, had adjusted its forecast for Mexico from 0.5% growth to a 0.1% decline.
However, after evaluating the impact that will have on the country, the fall in the U.S. economy, the closure of borders, the temporary closure of companies in the world, and other situations caused by the coronavirus, the institution now projects a collapse of national GDP of 4.5%.
From the perspective of BofAML, Mexico has an economy highly exposed to external demand, and to the extent that global GDP enters recession, factories in the country will have to reduce their production.
This week, Credit Suisse, the second-largest bank in Switzerland, lowered its estimate for the Mexican economy from a 0.7% expansion to a 4% drop for this year. The British multinational Barclays expects a contraction of 2%, the U.S. giant Goldman Sachs expects a setback of 1.6%, and the analysis unit of the rating agency Moody’s anticipates a decline of 1.5%.
Meanwhile, J.P. Morgan, the most significant investment bank in the United States, reduced its forecast of a 0.7% growth to a fall of 0.4%, whose main arguments were the interruptions it expects in the supply chains by the coronavirus, a situation that will significantly impact the manufacturing industry.
He added that, eventually, the Covid-19 would limit activities related to services, particularly tourism.