COVID-19: Mexico faces a grim economic outlook

The COVID-19 pandemic has had an enormous negative impact on the Mexican economy

COVID-19: Mexico faces a grim economic outlook
The federal government promised to create 2 million jobs this year but in reality, this promise is almost impossible - Photo: File Photo/EL UNIVERSAL
English 13/05/2020 09:11 Mexico City Editorial Actualizada 09:23
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Amid the COVID-19 pandemic, the IMSS registered alarming numbers in April, when 500,000 workers were removed from the registry, which means they were fired and that several companies have closed. Besides these figures, there are more losses in the informal sector, where millions of people have been trying to work for the last two months but they can no longer reach their clients. 

Estimates suggest the public health crisis will result in the loss of between 1 million and three million jobs that won’t be recovered in the short term; moreover, the COVID-19 pandemic could drive 10 million into extreme poverty

In addition to this outlook, the informal sector is what characterizes the Mexican economy. It is the result of a country that hasn't been able to provide formal jobs and that has forced many to self-employ; therefore, the pandemic was just the last straw. 

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The formal sector, although it is not desirable, has worked as a much-needed outlet to liberate the pressure generated by the high unemployment rates in Mexico and which has also forced millions of Mexicans to create their sources of income or to migrate to other countries. 

However, the public health emergency has canceled or suspended those alternative job opportunities. Nevertheless, the problem is not only about the loss of formal and informal jobs, but it also translates into people’s immediate incapacity to fulfill their rents, payments, school payments, credits, and services; this means that millions will stop circulating the national economy and result in a national impoverishment, which also includes the government. 

The government can’t ask the whole of society for help but several sectors have proposed different strategies to face the crisis, yet the government has ignored these suggestions. 

The federal government promised to create 2 million jobs this year but in reality, this promise is almost impossible to fulfill due to the condition of the national economy, which exacerbates the feeling of despair. It’s time to demand common sense and collaboration with those who have the destiny of millions in their hands. 

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