Mexico's pandemic-hit economy could shrink nearly 9% in 2020: central bank

MEXICO CITY - Mexico's economy could contract 8.9 percent in 2020, amid a slow recovery in global productivity affected by the novel coronavirus (COVID-19) pandemic, the Bank of Mexico (Banxico) said in a report released Wednesday.

Banxico's economic growth forecast shows gross domestic product (GDP) will expand by 3.3 percent in 2021 and by a more moderate 2.6 percent in 2022.

"There remains a high degree of uncertainty about the future evolution of (economic) activity, both nationally and globally," the governor of Banxico, Alejandro Diaz de Leon, said in a videoconference presenting the report.

"The baseline scenario assumes a gradual recovery, at a moderate pace, throughout the forecast timeframe, converging to inertial growth by 2022," Diaz said.

Diaz added the economic projections are skewed downwards, due to the presence of several risks, such as the possibility of stricter lockdowns due to a resurgence in COVID-19.