How will COVID-19 affect the Mexican economy?

In 2009, during a swine flu epidemic, the Mexican economy suffered a major setback

How will COVID-19 affect the Mexican economy?
The government is working to make sure that Mexico is ready to soften the economic impact sparked by the COVID-19 outbreak - Photo: Gustavo Graf
English 18/03/2020 09:25 Mexico City Editorial Actualizada 09:33
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COVID-19 hasn’t affected Mexico as expected but there are signs that the economy is not doing well. The U.S. dollar broke a new record and is sold at MXN $23.52, the oil prices collapsed to its lowest price in the last 18 years, and as it was expected, the Mexican Stock Exchange was affected by a worldwide “Black Monday,” although there was a recovery that allows softening the stock market crash in Mexico; however, some companies reported the deprecation of their stock by up to 30%.

The current government has worked to make sure that Mexico is ready to soften the economic impact sparked by the COVID-19 outbreak. According to the President, the economy is protected and the national reserves will be used and there will be no need to acquire foreign debt.

Recommended: COVID-19: Is Mexico swimming against the tide?

Although the President also praised the strength of the Mexican peso, the price collapsed a few days later, proving that it is not a good idea to claim victory early on, nor claiming that Mexican economy is invincible.

In this context, it’s expected that with the support of the government, the plan announced by the Finance Ministry will be successful and it’s not overshadowed by the economic crisis that has already started to affect the country. According to authorities, these are a series of measures originally planned to mitigate the slowdown of the global economy; however, with the arrival of the COVID-19 and its collateral damages, the strategy was readjusted to include the epidemiological emergency and the halt of economic activities, which will mainly affect medium and small companies.

The plan focuses on strengthening domestic consumption, offering credit lines with facilities that consider the decrease of the economic activity and counter a situation where the GDP decreased by 0.5%, similar to what happened in 2009 when there was a swine flu epidemic in the country.

Recommended: COVID-19 Live Updates: Mexico 

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