* Brazil's real down 3.3%, Mexico's peso ends 3-day winning run * IMF slashes Latam growth forecast on pandemic woes * Mexico inflation rises but analysts say rate cut still on * MSCI warns Argentina could be booted from EM index (Updates prices) By Shreyashi Sanyal and Susan Mathew June 24 (Reuters) - Latin American currencies and stocks fell on Wednesday, with Brazil's real down 3%, as COVID-19 infections continued to climb at an alarming pace, with investors scurrying for safety after downbeat economic forecasts for major regional countries. The death toll from COVID-19 surpassed 100,000 in Latin America on Tuesday, according to a Reuters tally, with few signs of the outbreak easing. A surge in cases in the United States and parts of Europe dented broader sentiment. The International Monetary Fund slashed its 2020 global output forecasts further as it now expects global output to shrink 4.9%, compared with a 3.0% contraction predicted in April due to impacts of the pandemic. Latin American economies saw some of the biggest downgrades, with Brazil's now seen shrinking 9.1%, Mexico's 10.5% and Argentina's 9.9%. The MSCI's index of regional stocks counterpart slumped 3.7% and its currency counterpart 2.3%, both marking their worst day in two months. They are down about 35% and 19% for the year, despite double digit percentage recoveries since year-lows. The Brazilian real weakened 3.3%, the most among regional peers. Brazil's public sector primary deficit this year excluding interest payments could be more than 11% of gross domestic product, Treasury Secretary Mansueto Almeida said, while the economy is set to shrink about 6% to 7%. The Mexican peso declined 1.6% after a three-day winning streak. Mexico's President on Wednesday said total layoffs in June could reach as high as 130,000. Data on Wednesday showed Mexican consumer prices rose more than expected during the first half of June, a figure that will likely keep policymakers in a cautious mood but is unlikely to deter them from slashing rates on Thursday to 5%. "Given the scale of the economic downturn, there's still scope for significant easing," said William Jackson, chief emerging markets economist at Capital Economics. "We expect 150 basis points of cuts in the policy rate this year, including a 50bps reduction tomorrow." Other regional currencies traded lower against a stronger U.S. dollar. Among others, MSCI Inc, the world's largest index provider, warned on Tuesday that Argentina could be removed from the MSCI Emerging Markets Index if it became harder for foreign investors to access its stock market. Argentina imposed tough capital controls last year after a market crash led to a dramatic pickup in foreign currency demand. Key Latin American stock indexes and currencies at 1902 GMT: Stock indexes Latest Daily % change MSCI Emerging Markets 1008.57 -0.6 MSCI LatAm 1905.58 -3.71 Brazil Bovespa 94227.93 -1.82 Mexico IPC 37871.51 -0.91 Chile IPSA 4036.34 0.11 Argentina MerVal 40285.85 -1.269 Colombia COLCAP 1117.01 -2.3 Currencies Latest Daily % change Brazil real 5.3260 -3.27 Mexico peso 22.7756 -1.61 Chile peso 818.8 -0.06 Colombia peso 3727.62 -0.79 Peru sol 3.5078 0.40 Argentina peso 70.0900 -0.07 (interbank) (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Bernadette Baum and Tom Brown)
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