Mexico City (AFP) – Mexico’s economy, hit by the epidemic, contracted by 8.5% in 2020, the largest decline since 1932 and the second consecutive year of contraction. GDP grew 3.15 in the fourth quarter of the year, according to preliminary data from the National Institute of Statistics and Geography.
Growth in the second half of 2020 allowed Mexico to exceed previous expectations for this year, from a double-digit contraction. The second quarter of the year, in which the epidemic spread and crippled most of the economy, recorded a contraction of 18% compared to the same period in 2019.
Unlike many of the largest economies in the world, the Mexican government has done little to support businesses or consumers. President Andres Manuel Lopez Obrador refused to borrow the country to mitigate the attack.
“The downturn in 2020 is not only a reflection of the devastating power of the virus epidemic, but also of the lack of preparedness and inadequate response from the current administration,” said Alfredo Coutinho, Director of Moody’s Analytics.
Part of the economy began to gradually reopen in June and the economy grew by 12% in the third quarter, but it remained 8.6% lower than the same period the previous year. Much of the improvement has been linked to increased economic activity in the US, Coutinho said.
The Mexican economy was already in recession before the pandemic.
“The government’s decision not to subsidize companies and protect employment has had a major impact on business deaths and deteriorating social welfare,” Coutinho added. Mexico ended 2020 with 840,000 fewer jobs than it did in February, before the pandemic began.