Economic Recession: more than 150,000 businesses close in Mexico

Mexican businessmen are barely trying to survive the economic recession — often unsuccessfully — that has deepened due to the COVID-19 pandemic. This without practically receiving assistance from the Government.

Business owners report that they are extending credit to their customers while laying off employees, or reducing their hours or wages.

Read more about the economic recession in Mexico from the point of view of businessmen!

The National Alliance of Small Merchants reported Tuesday that more than 150,000 businesses, most of them small businesses, have been forced to close during the pandemic. Last week, the government statistics agency said that 92 percent of businesses of all sizes reported that they had not received any government support in April and May. That due to the pandemic, according to its most recent survey.

According to the UN Economic Commission for Latin America and the Caribbean, the Mexican government increased its spending by just 1.1 percent of its gross domestic product to face the effects of the pandemic. It is one of the lowest increases in the entire region. Meanwhile, the government has stuck to its austerity goals, which have included cutting the salaries of many civil servants.

"The economic recession that the country is going through is of a greater dimension” than what the federal government is doing now. That is what Cuauhtémoc Rivera, president of the National Alliance of Small Merchants (Anpec), said. the institution includes approximately 95 thousand members.

Anpec represents neighborhood businesses. Examples are corner stores, tortilla shops, butcher shops and others. These are the businesses closest to customers and are usually family businesses in their own homes. They see the plight of customers, who buy more essentials on credit. Also, they seem to be emotionally exhausted.

The situation is serious!

In April, Mexico lost 550,000 jobs in the formal economy. Something around half of the jobs that have been lost to date.

Mexico is experiencing the worst annual drop for a quarter since the National Institute of Statistics and Geography (Inegi) began recording. The country remains with a figure in the second quarter of 2020 of -18.9%. This means that the Mexican economy contracted 2.2 times more than the worst quarter of the Mexican crisis. We are talking about the crisis that occurred in 1995. 

Conclusion

López Obrador has pushed to reopen commerce quickly to save the economy. Despite this, we are in a economic recession and infections and deaths from COVID-19 continue to rise.

Also read:

IMF: Mexican economy will be one of the hardest hit by COVID-19