Economy

Mexico is less affected by China's slowdown than other Latin American countries

Goldman Sachs report disclosed the Coronavirus' transmission channels between China and Latin American countries

Bank of Mexico
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Unlike Peru and Chile, which could be the most affected countries in Latin America with a risk of suffering a meaningful slowdown in their economies due to the coronavirus, Mexico, on the other hand, is most likely to be the less impacted by China’s slowdown. The information comes from a report from Goldman Sachs and was reported by Brazilian media outlet Valor Econômico.

In the study, in which Goldman Sachs raised the virus’s transmission channels between China and Latin American countries, analysts pointed out the low trade activity among Mexico and China as one of the main reasons why the Mexican economy is less affected by the crisis resulting from the Chinese slowdown. Mexico could be, however, indirectly affected by a drop in revenues from oil exports, which are already being hit by the drop in barrel prices on the international market.

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“Mexico’s public revenues would be affected by the drop in the price of export oil, especially in a context of lower Pemex production. Eventually, this would spread to the transmission of the Mexican economy through lesser fiscal spending, since the revenues generated by hydrocarbons decreased,” Goldman Sachs report disclosed.