Mexico’s GDP shrinks as economy falls deeper into recession

Mexico registered a fifth consecutive quarter of economic contraction confirming the country is in recession since early 2019

Mexico’s GDP shrinks as economy falls deeper into recession
English 30/04/2020 16:29 AP Mexico City Actualizada 16:57

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Mexico’s economic activity dropped 1.6% in the first quarter compared to the final three months of 2019, plunging the country deeper into a recession that predated the pandemic, according to a report released Thursday by INEGI,  the government statistical agency.

It was the fifth consecutive quarter of economic contraction and the biggest since 2009. The INEGI report said gross domestic product for the first quarter was 2.4% below the first quarter of 2019. The country’s economy has been slowing since mid-2018.

Mexican President Andrés Manuel López Obrador, who has said he does not want the country to take on more debt during the pandemic, has been criticized by the business sector for not doing enough to keep the economy afloat.

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The economic consequences of social distancing measures to slow the virus’s spread are expected to be more fully on display in the second quarter.

López Obrador has bet on a series of big infrastructure projects to reactivate the economy and create jobs. One of the main projects is a tourist and passenger train that would run 1,525 kilometers around the Yucatan peninsula. Known as the Mayan Train, the project would connect tourism resorts and ruin sites.

On Thursday, the national tourism fund announced that a company owned by Mexico’s richest man — telecom and construction magnate Carlos Slim — had won a contract to build part of the rail line.

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A consortium including Slim’s Operadora CICSA and Spain’s FCC Construcción SA won bidding on the second portion of the Mayan Train line, which runs 146 235 kilometers through the state of Campeche.

Last week, the winner of bidding on the first section was announced. A Chinese-Mexican consortium of companies won that contract.

There are environmental and development concerns about the project, which is envisioned to carry tourists from the white sand beaches of the Mayan Riviera to the peninsula’s more remote interior.

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