Today Bank of America cited the Chinavirus (COVID-19) pandemic crisis and a global drop in crude oil prices to forecast an 8.0% GDP drop for Mexico this year. Just a few weeks ago on March 19 the bank had warned of a 4.5% contraction for 2020. The doubling of the negative economic impact on Mexico’s growth rate highlights the expanding magnitude of the pandemic and the exponential growth of its destructive power.
On Monday the Mexican peso fell 5% approaching all-time lows as oil prices tanked to multi-year lows, piling more pressure on heavily indebted state-oil firm, Pemex. Mexico’s state oil company Petroleos Mexicanos (PEMX.UL) said on Tuesday that it will maintain crude production levels even as the coronavirus pandemic erodes demand around the world and crude prices continue dropping to historic lows.
Trump administration is sending an additional 500 troops to the nation’s border with Mexico to prevent people infected with the coronavirus from entering the US. The US already has roughly 5,000 military personnel at the border. The DOD has also sent Navy war ships into the Gulf of Mexico and started reconnaissance flights by the Air Force.