(Bloomberg) -- Latin America's two-largest economies are expected to diverge further over the next two years as the International Monetary Fund slashed its outlook for Mexico's growth while largely maintaining its estimates for Brazil's recovery.
The IMF cut its forecast for Mexico's gross domestic product by a combined 0.9 percentage points in 2019 and 2020, citing lower private investment, according to the update of its World Economic Outlook published Monday in Davos. By contrast, expectations for Brazil barely changed.
| New 2019 Forecast | Prior 2019 Forecast | New 2020 Forecast | Prior 2020 Forecast | |
|---|---|---|---|---|
| Brazil | 2.5 | 2.4 | 2.2 | 2.3 |
| Mexico | 2.1 | 2.5 | 2.2 | 2.7 |
Brazilian President Jair Bolsonaro, a former Army captain, plans a three-day publicity and investor outreach at the Swiss ski resort in a bid to show the economy is open to investment, privatization opportunities abound, and that the country is leaving behind the corruption scandals that plagued previous governments.
To read more: Brazil Is Back in the Game, New Leader Will Tell Davos Investors
Mexico, on the other hand, will have a considerably smaller presence in Davos after leftist President Andres Manuel Lopez Obrador disbanded investment-promotion agency ProMexico and decided to skip the forum. Despite his calls for more private investment, AMLO, as the 65-year-old leader is known, spooked investors by canceling the construction of a new $13 billion airport and has repeatedly criticized the overhaul of energy laws approved by his predecessor, which was designed to draw more private and foreign oil investment to Mexico.
To contact the reporter on this story: Eric Martin in Mexico City at emartin21@bloomberg.net
To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Walter Brandimarte
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