Government says Mexico’s economy is almost 100% of pre-pandemic level

RIO DE JANEIRO, BRAZIL – Mexico’s Ministry of Finance and Public Credit (SHCP) said Thursday that economic activity is at 99.6 % of the pre-pandemic level and employment at 98.8% after the first half of 2021.

“In the second quarter, economic activity continued on its recovery path and approached pre-pandemic levels faster than expected,” it said when presenting the reports on the economic situation, public finances, and public debt to the second quarter of 2021.

The SHCP pointed out an annual growth of 6.2% based on the Global Economic Activity Index (IGAE) for the first five months of the year.

It also assured that 12.3 million formal and informal jobs were recovered through June, an average of 880,000 jobs per month since March 2020, when restrictions began in Mexico due to the Covid-19 pandemic.

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“Mexico’s economy is in a solid phase of recovery thanks to the strengthening of the domestic market, which has been consolidated with the opening of economic activities derived from the progress of the vaccination program,” the agency asserted.

The reports are published one day before the National Institute of Statistics and Geography (Inegi) reveals the behavior of the GDP in the first half of 2021.

In addition to 2.79 million infections and almost 240,000 deaths, the fourth-highest figure globally, the Covid-19 crisis caused a historic contraction of 8.2% of GDP in 2020.

Now Mexico is facing a third wave of contagions, but the government has rejected further restrictions by arguing that vaccination is progressing, although only about 25 million people are fully vaccinated.

“Consumption and private investment continue to expand, supported by reduced health restrictions and improved economic conditions. In April, both indicators stood at 97% of their pre-pandemic level,” the SHCP indicated.

The Government has anchored its forecast of a GDP rebound of more than 6% for 2021 in the external sector, particularly the US-Mexico-Canada Agreement (USMCA).

The Treasury highlighted the receipt of US$19.2 billion in remittances between January and May, in addition to a recovery of almost three-quarters of the tourism GDP.

On the other hand, he highlighted that debt as a percentage of GDP has remained at 47.9% in the first half of 2021 compared to the 52.4% reported in 2020.

President Andrés Manuel López Obrador boasted of the new forecast from the International Monetary Fund (IMF), which raised its growth forecast for Mexico in 2021 to 6.3 %.

“Mexico is one of the 10 most attractive countries in the world for foreign investment because there is an authentic rule of law, which there was not before,” he declared in his morning press conference this Thursday.