Sunday, June 13

Coronavirus: why Mexico is the Latin American country that has spent the least money during the covid-19 pandemic

  • Cecilia Barría
  • BBC World News

Woman with baby

Image source, Getty Images


While Mexico spent 0.7% of GDP on fiscal aid during the pandemic. Brazil implemented a fiscal stimulus package that reaches 8.8%.

Mexico followed the path of fiscal austerity during the covid-19 pandemic. A path that even the International Monetary Fund, IMF, has not recommended.

Unlike what it did at the outbreak of the 2008 financial crisis, the IMF this time was in favor of borrowing governments to cope with the recession, except in those economies whose fiscal coffers are dry or have no capacity to achieve resources in financial markets.

“To stop the decline in economic activity and the increase in poverty, Mexico would benefit from greater temporary fiscal support in the short term,” says a report by the agency published in October last year, in which it recommends spending between 2, 5% and 3.5% of the Gross Domestic Product, GDP.

“Mexico has some fiscal space and enjoys comfortable market access that could be used during these difficult times,” the document added.

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