Contrary to earlier predictions, Mexico's Gross Domestic Product (GDP) could grow 0.91 percent in 2020, a little bit lower from the 1.00 percent expected in January, according to a survey reported by Mexico Business.

The Bank of Mexico, or Banco de Mexico (Banxico) as it is known locally, consulted 38 economic analysts who believe that the National Consumer Price Index (INPC), or inflation, could increase 3.53 percent this year, a figure higher than the 3.50 percent forecasted in January.

The expected economic growth in 2021 also went down to 1.60 percent, from the 1.70 percent projected earlier. Meanwhile, INPC projection for 2021 was left unchanged at 3.50 percent.

In an article by Latin Post, Mexico's economy contracted 0.14 percent in 2019, according to the figures released recently by the National Institute of Statistics and Geography (INEGI).

Mexico,s GDP dropped in the Q4 of 2019, registering a 0.4 percent contraction, the sharpest fall of the year. While the country's economy did not decline in the Q1 and rose by 0.1 percent in Q2, contraction began in Q3 at 0.2 percent. As Mexico registered two consecutive quarters of economic contraction, it has met the technical definition of a recession.

Banxico's Survey on Expectations from Private Sector Specialists in February revealed that analysts expect the exchange rate by the end of 2020 to be MX$19.50 per dollar, 16 cents less than the prior estimation. For 2021, the MX$20 per dollar remains unchanged from the previous estimate.

The survey was made last week when the COVID-19 (coronavirus) outbreak began to take a toll on markets worldwide. However, Mexico was tagged as a low risk country.

Earlier this week, the Organization for Economic Co-operation and Development (OECD) announced it expects the world's economy to grow half in 2020, leaving it at 1.5 percent.

As the coronavirus outbreak caused a deep decline in China's GDP, other economies such as Japan, South Korea and Italy also reported lower growth estimations.

This alone could already trigger a global slowdown, according to OECD. The organization also fears that if the outbreak worsens and the virus spreads to Japan and Europe, more economies could go into recession.

One of the industries to be severely hit is the manufacturing, especially in economies highly dependent on global manufacturing supply chains, which is the case of Mexico. If contractions in production persist due to major supply chain disruptions, experts anticipate a worsening crisis.

Despite a growing number of analysts warning about a global recession, saying the COVID-19 infection is far from over, governments and authorities have been calling people not to panic and markets to not overreact.

Stock markets bounce back

Following a week of losses, Dow Jones gained little higher than 5 percent on Monday while S&P 500 and NASDAQ increased more than 4 percent. From Friday's session, Bolsa Mexicana de Valores IPC gained 2.04 percent which gived some fresh air to stock markets and investors in the start of the week.

As of Monday, the exchange rate also had some relief at MX$19.74 per dollar, a gain of 24 cents for the national currency.

Fed cut

Amid a backdrop of a stagnating economy and slightly above-target headline inflation, Mexico's central bank on Thursday has cut its key interest rate by 50 basis points at its monetary policy meeting in late March, 25 basis points higher than a forecast two weeks ago following the U.S. Federal Reserve's surprise rate cut, according to a WZKO article.