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Mexico’s economy will take five years to recover

The Center for Economic Studies of the Private Sector (CEESP) announced in its weekly analysis that the recovery of GDP to levels in which it had in 2018 will take more than five years to recover after the COVID-19 pandemic.

The agency estimates that during the administration of President Andrés Manuel López Obrador the economy will register a cumulative drop of 2%, but in per capita terms, the contraction will be between 7 and 8 percent. According to the Ministry of Finance and Public Credit (SHCP), GDP could close the year with a 7.4 percent drop.

“In this scenario, job creation would be significantly limited,” he says. In the case of the recovery of formal jobs, he estimated that it could take three years to recover the 1.1 million jobs that the IMSS reported were lost between March and June (half of the jobs were eliminated during the month of April, with 555,247).

Estimates from the National Council for the Evaluation of Social Development Policy (Coneval) indicate 10.7 million more Mexicans will be pushed into poverty.

CEESP points out that it is likely that public finances will remain stable next year, because there will be a remnant of Banco de México’s operation, as well as resources from contingent funds and trusts.

Arturo Herrera, Secretary of the Treasury, said he will send an economic package “very careful, prudent, responsible and that will require the understanding and solidarity of many, because there will be fewer resources in the budget than this year and, at least, two previous fiscal years ”.

In addition, he specified that the conditions facing the country for next year is that there will be no extra resources, because it was money that was used to lessen the impact of the coronavirus health crisis.

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