Mexico registers the worst fall in GDP in 11 years

Mexico’s gross domestic product fell 1.6 percent between January and March compared to the previous quarter and 2.4 percent compared to the same period in 2019, according to data released Thursday by the National Institute of Statistics and Geography ( Inegi).

Analysts stressed that this is the largest decrease in GDP in 11 years and it is the fifth consecutive quarter that it contracted compared to the immediately previous quarter, “something not seen in the Inegi series available since 1993,” said Gabriela Siller, analyst at Banco Base.

President Andrés Manuel López Obrador, who does not want to go into debt to cope with the effects of the pandemic, has been criticized by the private sector for not taking sufficient measures to face the crisis caused by social isolation and the suspension of non-essential activities established to curb coronavirus transmission.

However, the president remained optimistic.

“Fortunately it was less than what our opponents were predicting,” he said Thursday at his morning press conference. He insisted that it is a “transitory crisis” that will emerge “relatively soon”, although he acknowledged that there is no victory to be chanted because the most difficult is coming.

Mexico, with more than 19 thousand 224 confirmed cases of Covid-19 and at least 1,859 deaths, expects the peak of the pandemic by mid-May, and it would be later when the economic situation worsens further.

“We are not yet feeling all the effects of the crisis, but it does not catch us with a deficit. That is why I am optimistic and I feel that we are going to succeed,” he assured.

As he said, thanks to the government’s austerity policy, revenues have been increased and this will allow Mexicans not to suffer as much.

The key is not to allow corruption,” he added.

López Obrador recalled that world forecasts point to falls in the economies of around 6% and assured that Mexico will not be the exception, although he said that the effects would be different.

“We have a new model where people are protected. That is the difference; there is no corruption, there is no waste, there are no luxuries and this allows us to save and allocate more resources for the poor,” he added.

Alfredo Coutiño, from the consultancy Moody’s, predicted a further contraction of the Mexican economy in 2020 given its high dependence on the United States, the fall in the price of oil and tourism – two of the country’s engines – and the timid policies applied by the authorities to compensate for the brake caused by the pandemic.

The Ministry of Finance and Public Credit said Thursday that the economy “will benefit from the coordinated reopening of key sectors, adopting the necessary health protocols (to) ensure the operation of value chains with Canada and the United States.”

Washington recently launched a campaign to get Mexico to reopen plants vital to its economy, such as those in the auto industry. The Mexican government is looking for a way to do it with due sanitary precautions, although at the same time it is criticizing that other industrial and commercial sectors remain open.

The US Deputy Secretary of Defense, Ellen Lord, praised the positive response of Mexico to the reopening of plants and that she has known how to value the importance for the national security of the United States.

On the other hand, Petróleos Mexicanos, the parastatal energy company, reported an increase in crude oil production of 4.1 percent in the first quarter compared to the same period of the previous year.

“In this way, the growth trend in production is maintained, a situation that has not occurred for 14 years,” it said in a statement.

López Obrador wants Congress to approve an initiative with the necessary budgetary modifications to implement its plans to reactivate the economy – restructuring money from funds, new loans, support for construction – but it is not clear that it can succeed. , since the opposition could block the extension of the session to debate this issue.

Source: netnoticias.mx

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