02063cas a2200265 a 4500 AALejournalIMF021306 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513559018 1018-5941 BD-DhAAL BD-DhAAL Hannan, Swarnali. Mexico Needs a Fiscal Twist : Response to Covid-19 and Beyond / Swarnali Hannan, Keiko Honjo, Mehdi Raissi. Washington, D.C. : International Monetary Fund, 2020. 1 online resource (33 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Mexico's fiscal response to the pandemic has been modest compared to its peers, reflecting the authorities' desire to not issue new debt for spending. This approach, however, risks a more severe recession and a weaker economic recovery, with further costs in the future. Balancing the need for stronger near-term fiscal support for the people and the recovery against medium-term discipline, this paper lays out an alternative strategy. We show that credibly announcing a pro-growth and inclusive medium-term fiscal reform upfront-including increased tax capacity, higher public investment and strengthened social safety nets-would open space for larger short-term support and close medium-term fiscal gaps. Model simulations suggest that this package would boost output, limit lasting economic damage from the pandemic, and put debt trajectory on a declining path in the medium term as tax reforms pay off and risk premia decline. Mode of access: Internet Honjo, Keiko. Raissi, Mehdi. IMF Working Papers; Working Paper ; No. 2020/215 Full text available on IMF http://elibrary.imf.org/view/journals/001/2020/215/001.2020.issue-215-en.xml IMF e-Library