Mexico will start 2020 in recession and economic deterioration has not yet bottomed out

Mexico’s economy will decrease up to 0.5% at the end of 2019 and in 2020 it will not exceed 0.9%; and this will bring less employment and income for families: specialists

Mexico will start 2020 in recession and with an economic deterioration that has not hit bottom; what will have social consequences in terms of employment and precariousness of family income during the next months, warned specialists consulted by Publimetro.

They explained that the negative projections regained strength in the last week of 2019 after the Inegi reported that the Global Economic Activity Index (IGAE) had a monthly and annual decline of 0.5% and 0.7%, respectively, at the end of October past.

The deputy governor of the Bank of Mexico, Jonathan Heath, said the monthly decline in the country’s economic activity is widespread; since it comes from decreases of 1.6% in agriculture, 1.1% in industry and 0.1% in services and commerce.

“We started the quarter badly, since the IGAE decreases –0.5% in October; to be located -0.7% below its level last year, ”said the Central Bank manager through his Twitter account.

The director of the Institute for Industrial Development and Economic Growth, José Luis de la Cruz, explained that the monthly and annual decline of the IGAE confirms that the Mexican economy remains in a recessive phase; with four consecutive annual falls in the last five months.

“The average economic growth, both in the six-year period and in the first 10 months of the year is already negative: minus 0.1%. In addition to the IGAE cycle shows that the Mexican economy is in recession and has not yet bottomed out, ”he said.

AFFECTED INDUSTRY AND SERVICES

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The IDIC director explained the most severe symptom of these circumstances is the “recession that the national industry is experiencing”; with 13 consecutive months of negative rates. As well as effects that already contaminated the domestic market through less jobs and precarious wages.

A proof of the above, he said, is in the latest report published by the Mexican Social Security Institute (IMSS); which reports a minimum increase of 346 thousand places during the last 12 months.

“This figure is clearly lower, compared to the one million 200 thousand formal jobs that the population demands each year; just to cover population growth “and offer opportunities to young people who are integrated into the labor market,” he said.

Another consequence of the recessive phase, said the specialist, is in the annual contraction of 0.1% recorded by the service sector at the end of last October; generated by a 5.9% decrease in wholesale trade, with which nine months are linked followed by falls.

As well as a 1.2% decrease in financial and insurance, real estate and rental services for movable property; which already added three consecutive months of downward adjustments; with effects that pay for the loss of jobs and income.

ECONOMY OF MEXICO 2019-2020

Professor emeritus of Tec de Monterrey, Raymundo Tenorio Aguilar, explained that the Mexican economy will close 2019 with:

  • Decrease between 0.3 and 0.5% of GDP.
  • Less than 500 thousand formal jobs
  • Inflation close to 3.2%.
  • Less consumption due to economic deterioration.

While in 2020:

  • The economy will grow just 0.9% of GDP.
  • Around 578 thousand formal jobs will be created; 78 thousand more than in 2019, due to the infrastructure works announced by the federal government.
  • There will be salary increases of 3% or less for 20.8 million Mexicans who earn more than a minimum monthly salary.
  • In addition to new setbacks in industry, construction, suppliers of materials and services for construction; and falls in the production of furniture, rubber products, textiles, machinery and equipment, among other effects.


Source: publimetro.com.mx

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