Mexico’s economy shrank by more than 17 % in the second quarter, the biggest drop on record, as the lockdown measures imposed in response to the COVID-19 pandemic hampered economic activity.
The huge drop in GDP must have embarrassed the president, who at one point refused to wear masks despite having been told that preventive measures were vital to reopen the economy quickly.
According to government data, around 1 million people have lost their jobs. But that may not be the real picture, because more than half of Mexicans work in the informal sector, making it difficult for analysts to gauge the actual magnitude of job losses.
Shocked by the economic data, the government has now permitted bars, cinemas, and restaurants to reopen partially.
However, President Andrés Manuel López Obrador (AMLO) has continued to say that he is optimistic, insisting that his strategy is working and that the economy would recover quickly.
“The worst is behind us. Our strategy has worked. Now we are recovering,” he told a press conference last week.
But economists are no longer interested in buying his argument, largely because this is the fifth quarterly contraction in a row. And Mexico was already teetering on the brink of recession when coronavirus struck.
Nearly half a million Mexicans have been infected with the virus, with the country reporting more than 45,000 fatalities.