Home Feature Mexico will be the economy hardest hit by the pandemic: UNCTAD.

Mexico will be the economy hardest hit by the pandemic: UNCTAD.

by Yucatan Times
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In 2020, Mexico will fall 10%, the most profound fall among Latin American countries, while by 2021, it will have a very tenuous growth of just 3%

MEXICO CITY (apro).- The covid-19 pandemic will leave Mexico as the economy hardest hit in Latin America by the lack of tax incentives, unemployment in tourism, and the decline in exports, warned the Conference of Nations United Nations on Trade and Development (UNCTAD, for its acronym in English).

In numbers, the country’s Gross Domestic Product (GDP) will collapse 10%, according to the international organization’s projections. In comparison, Latin America and the Caribbean as a whole will have a fall of 7.6%. Brazil will decline by 5.7%, and Central America will decrease its GDP of 5.2% for this year.

“In 2020, Mexico will fall 10%, the deepest drop among Latin American countries, while by 2021 it will have a very tenuous growth of just 3%. It will not be a V-shaped recovery,” said Alex Izurieta, senior economist at UNCTAD, when presenting the 2020 Trade and Development Report.

Such a forecast is far from the forecast of the Ministry of Finance and Public Credit (SHCP), maker of the country’s economic and fiscal policy, which for 2020 anticipated a drop of 8.6% and a recovery of 4.6% in 2021.

“Three factors badly hit Mexico: the first is that it is a country that depends a lot on exports, manufacturing, and is an exporter of primary goods such as oil, whose prices have fallen; the tourist factor, where the country has been specializing, and the decisive lack of fiscal push to counteract the pandemic is very atypical, although it has occurred in several countries,” Izurieta stressed.

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In this sense, the economist Luis Foncerrada Pascal warned that employment will still take time to recover and reach the levels before the covid-19 pandemic.

He specified that during the pandemic rise, unemployment reached 34 million people, equivalent to 53% of the country’s labor force, while in July, the figure was reduced to 23 million. Although it is less, it still represents 36% of the people with possibilities to work.

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