Mexico brushes 100,000 deaths from COVID-19 with the dying economy and no antidote

While the pandemic touches 100,000 deaths and passes one million infections, the economy is dying with a cumulative drop in GDP, tens of millions of new poor and the absence of an economic antidote from the Government

While the pandemic is close to 100,000 deaths and exceeds one million infections in Mexico, the economy is dying with a cumulative drop of 9.6 percent of the Gross domestic product (GDP), tens of millions of new poor and the absence of an economic antidote to the government.

“I would not say that it was a different strategy from the other countries because there was not even an economic strategy as such,” says in an interview Edmar Ariel Lezama, coordinator of the Unique Program of Specializations in Economics at the National Autonomous University of Mexico (UNAM).

Mexico It is the eleventh country with the most infections and the fourth with the highest number of deaths, according to the Johns Hopkins University.

It is also one of the hardest hit economies in the world, according to the International Monetary Fund (IMF), which predicts a contraction of the 9 percent this 2020.

Sick economy

But before the pandemic, Mexico it already had a decrease of 0.3 percent in 2019, for which it accumulates six quarters of contraction, warns Eugenio Sanchez, an expert in finance and applied economics.

“A specific issue for Mexico is that we already had a mild recession because it caught us in a change of government and also a government that brought a lot of uncertainty, for example, in all of 2019 there was no quarter in which public investment grew nor private, ”he observes.

The government maintains that the economic curve will be a “V” because it “bottomed out” in the second quarter of the year, with a historical annual contraction of 18.7 percent, plus an evident rebound from July to September, with a 12 percent quarterly growth.

Although he agrees that the economy “has already hit bottom”, Sanchez warns that the pandemic leaves economic scars that will take time to heal.

“It would be a recovery in two stages, where the first is fast, which is what we are already seeing, but then it will not be so fast, and the effects for many people, especially the poorest, can last for years”, considers.

Poor and informal

If the mexican economy decreases a 7 percent this year, 12 million people would fall into poverty and others 12.3 million would go into extreme poverty, according to a study by BBVA Mexico.

In this way, the percentage of the poor population by income in Mexico would grow from the current 48.8 percent to 58.4 percent, while extreme poverty would increase from 16.8 percent to 26.6 percent.

“The recovery is not equitable across the different sectors. For example, it took eight years for unemployment and poverty to recover from the 2008 crisis despite the fact that GDP recovered relatively quickly, ”he says. Sanchez.

For the pandemic, Mexico lost 12 million informal jobs and more than 1 million formal, reported the head of the Ministry of Finance and Public Credit (SHCP), Arturo Herrera.

So far, the country has recovered 7.5 million of those positions, at least 7 million from the informal sector, the official said last week.

“We have been having this (economic) rebound already throughout these months, from June to now, having until now under control of the pandemic,” he said.

But Lezama warn that, yes Mexico experiences outbreaks such as those in Europe or the United States that force a reconfinement, the effects could be catastrophic because between the 55 percent and the 60 percent of the workforce is informal.

“The fact that we are a mostly informal country hits, if we have to lock ourselves up again, the same thing that happened at the beginning of the quarantine will happen, with families that cannot generate any type of income, since they are not linked to formal jobs”, manifests.

Uneven crisis

Three out of four deaths from COVID-19 in Mexico, the 75 percent, they had only one level of basic education, from primary or secondary, according to a research by the Regional Center for Multidisciplinary Research of the UNAM.

On the other hand, the 48 percent had a trade or manual occupation and 45 per cent were housewives, retired or unemployed.

“Generally they are poor people and linked to informality, which is explained by not having access to a health system or having a fixed income that allows them to buy medicine or have savings to face this problem,” he details Lezama.

In addition to representing human losses, these deaths will also have economic consequences for Mexico, laments the teacher.

“The fact that a pandemic ends up killing your workforce, your human capital, no matter how good or poorly qualified it may be, has an impact, not in the short term, but in the medium and long term in economic terms”, concludes.

With information from .