MEXICO CITY (Reuters) – Mexico should implement larger near-term fiscal support to alleviate economic distress, the International Monetary Fund said on Tuesday, recommending the government expand its welfare net and unemployment benefits.
In preliminary findings reported after a visit to Mexico, the IMF said Latin America’s second-largest economy should also further lower interest rates to help the recovery from the worst contraction since the 1930s Great Depression, largely induced by measures to contain the coronavirus pandemic.
In its report, the Washington-based IMF proposed tax reform to support spending in the medium-term. The Mexican government has resisted raising taxes, although it has made efforts to increase tax collection and enforcement.
Mexican Deputy Finance Minister Gabriel Yorio later responded on Twitter by saying the government disagreed with some of the IMF recommendations, in particular the idea of raising taxes in the middle of a major recession.
Despite emerging from the political left,