Mexican government forecasts economy will contract as much as 3.9% in 2020

Mexico's government forecast the economy will contract by as much as 3.9% in 2020, but predicted a rebound in 2021 to as much as 3.5% growth, the finance ministry said on Wednesday in an annual economic report used to guide the budget.

"The economic forecast under the current circumstances has a high level of uncertainty amid the complexity of the (coronavirus) epidemic, making it difficult to establish a specific growth forecast for the domestic economy," it said. The government put an upper limit for its 2020 growth forecast of 0.1%. It also forecast that annual inflation would reach 3.5% at the end of 2020 before coming down to 3.2% in 2021.

Mexico has reported 1,378 coronavirus cases so far, with 37 deaths. The government declared a health emergency on Monday and issued stricter rules aimed at containing it, but has not ordered a lockdown like most of its regional peers.