Mexico budget foresees economic rebound next year

Mexico’s government predicted Tuesday that Latin America’s second-largest economy will grow by 4.6 percent in 2021, rebounding from a severe coronavirus-induced slump this year.

Finance Minister Arturo Herrera, presenting next year’s budget to lawmakers, said gross domestic product (GDP) was projected to contract by 8.0 percent in 2020.

The country faces “the most severe health crisis since the Spanish flu” in 1918, he said, pledging to make fighting the coronavirus a priority with a 9.2-percent increase in health funds.

But he refrained from announcing major stimulus for the economy, with the total budget set to shrink by three percent compared with this year.

Some analysts have criticized President Andres Manuel Lopez Obrador for not spending more to boost the economy in the face of the coronavirus outbreak.

The left-wing populist says his priority is helping ordinary Mexicans with social aid and loans while avoiding saddling the country with increased debt.

The Mexican economy suffered a record 17.3 percent contraction in the second quarter of the year from the previous quarter.

The government imposed lockdown measures at the end of March and started gradually reopening the economy in June.

The country has registered around 68,000 coronavirus deaths — one of the world’s highest tolls.