Reports MEXICO MARKET REPORT
since economic output fell 1.8 per cent in 2009 following the global financial crisis.
Te forecasts for 2020 were already weak before the pandemic with speculation mounting by March that the slump could last for years. Analysts now predict that growth will slow to 0.9 per cent in the fourth quarter, with the economy shrinking 9.2 per cent overall in 2020. Meanwhile the percentage of workers living in poverty has grown from 35.7 at the start of the year to 44.5 per cent in the third quarter.
COVID-19 AND ITS IMPACT
Latin America has been particularly hard hit by the COVID-19 pandemic. In November, Mexico became the fourth country to cross the 100,000 threshold for confirmed COVID-19 deaths, joining the US, Brazil and India.
López Obrador has been criticised for initially downplaying the pandemic in hopes of keeping the economy open. His administration was slow to order lockdown measures and eased them too quickly.
Overall, the government’s response has also been slow and erratic. In March, López Obrador told the media that his personal “protective shield” against the virus consisted of amulets and prayer. Tese amulets included a six-leaf clover, and a $2 US bill. As governments around the world began to introduce social distancing measures, the government published public
P112 NEWSWIRE / INTERACTIVE / MARKET DATA
messages that encouraged Mexicans to continue their normal routine and argued that there was no need to cancel mass events. Tankfully, this stance has shifted as the pandemic has worsened. Te federal government finally announced that social distancing measures would begin on March 23.
Despite a lockdown the situation worsened. Te World Health Organisation (WHO) warned of a “very worrisome” situation after the number of weekly deaths doubled between mid-October and late November. At the end of November WHO stated that “Mexico is in bad shape” after a 25 per cent increase in deaths. In December, López Obrador called on citizens to act responsibly after hospital occupancy in the capital rose sharply.
Te pandemic has had a devastating affect on the economy, hitting the tourism industry especially hard. Tourism is one of Mexico's main sources of foreign revenue, along with automotive exports, oil and foreign direct investment. International tourism to Mexico plummeted 43.7 per cent in October year-on- year, according to the National Institute of Statistics and Geography (INEGI).
Since mid-July, the government has allowed hotels to operate at just 30 per cent of their capacity. About nine per cent of Mexico’s gross domestic product comes from the tourism sector, which has been losing around US$180m per day since the pandemic started.
Mexico’s economy is forecast to contract by up to 9.3 per cent in 2020 after an easing of pandemic control measures that had caused an alarming 18.7 per cent decrease in the second quarter from a year earlier. Te Bank of Mexico, (Banxico), said the economy could grow between 0.6 per cent and 5.3 per cent next year, after shrinking between 8.7 and 9.3 per cent in 2020. However, there is still a high degree of uncertainty about the effects of COVID-19 on the economy in the long-term.
COVID-19 AND ITS IMPACT ON THE GAMBLING INDUSTRY
COVID-19 has hit the industry hard. Around 400 gambling establishments were temporarily forced to close during the pandemic. Chihuahua’s casinos, for example, have recorded losses of US$11.3m affecting 80 per cent of the jobs generated by the industry.
President of the Mexican Gaming Association (AIEJA), Miguel Angel Ochoa Sanchez, said that it will take the sector two years to recover to similar revenues of 2019. Te organisation has asked for the deferment of certain fees and taxes to get through the crisis.
In November, casinos in the Mexican capital suffered another setback as they had to reduce their operating hours for the second time in less than a month, as a preventive measure designed to stop the increase in infections due to the COVID-19 pandemic.
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