The worst economic results in 86 years: Coparmex asked AMLO to “correct the course” and act without populism

The first three years of AMLO's government will be the worst in 86 years, assured Coparmex (Photo: Victoria Valtierra / Cuartoscuro)
The first three years of AMLO’s government will be the worst in 86 years, assured Coparmex (Photo: Victoria Valtierra / Cuartoscuro)

The Employers’ Confederation of the Mexican Republic (Coparmex) called on the government of the Republic to “Correct the course” given the “adverse” economic outlook of 2021.

Furthermore, he noted that “The initial three years of the government of President Andrés Manuel López Obrador will be the worst first half of a six-year term in economic results in 86 years.”

According to the projections of the Economic Commission for Latin America and the Caribbean (Cepal), by 2021 a 3.8 percent recovery. Which means that between 2019 and 2021 the Mexican economy will have accumulated a contraction of -5.5%, according to the agency’s data.

For Mexico, this means that during López Obrador’s six-year term, which ends in 2024, economic growth could be zero. But even if the country does not grow at rates of at least 1.8% between 2022 and 2024, the six-year economic balance would be negative

Gustavo de Hoyos asked the Government of Mexico "correct course and implement economic relief measures" in favor of the country (Photo: Twitter)
Gustavo de Hoyos asked the Government of Mexico to “correct the course and implement economic relief measures” in favor of the country (Photo: Twitter)

Since the beginning of the current administration there has not been a single quarter with economic growth. Situation that worsened with the arrival of the SARS-CoV-2 virus in the country, said Coparmex in its 2021 economic balance.

The situation prior to the pandemic was already characterized by a marked economic deterioration and an anti-business environment from the Federal Government visible in multiple rule changes, blocking of permits for private investment and lack of legal certainty

Based on the analysis of indicators, the business organization found that economic activity contracted (-) 0.1% in 2019, an issue that draws attention, since in 10 years there had not been a decrease.

Likewise, it reported that Gross Fixed Investment, which measures confidence and expectations to invest, showed consecutive annual falls. In addition to this, in November 2019, the business confidence of the three sectors measured by INEGI (construction, manufacturing and commerce) it already exhibited pessimistic levels (13 months in a row). While, construction sector accumulates 25 months with the same scenario since November 2018.

According to Coparmex, since the beginning of the current administration there has not been a single quarter with economic growth (Photo: EFE / Sáshenka Gutiérrez)
According to Coparmex, since the beginning of the current administration there has not been a single quarter with economic growth (Photo: EFE / Sáshenka Gutiérrez)

Another problem detected prior to the pandemic is the “Zero” job creation. According to Coparmex, 342,077 formal positions were created in 2019, which represents 50% less than the data recorded in 2018 and 26% less than what was seen in 2013.

On February 28, the first case of coronavirus was detected in Mexico; before its imminent spread in the national territory, the federal government detected the closure of non-essential sectors of the economy.

The National Healthy Distance Day lasted nine weeks and brought negative impacts on the pockets of Mexicans.

According to the organization, The specialists predict that Mexico will register a contraction of the Gross Domestic Product (GDP) of (-) 9.0%, “The steepest in the country since 1932.”

According to the organization led by Gustavo de Hoyos, Mexico was one of the countries that allocated a lower percentage of its GDP to fiscal support (Photo: EFE)
According to the organization led by Gustavo de Hoyos, Mexico was one of the countries that allocated a lower percentage of its GDP to fiscal support (Photo: EFE)

When compared internationally, “we can confirm that Mexico was one of the countries that allocated a lower percentage of its GDP to fiscal supportbarely 1%, while nations such as Peru, Brazil or Chile allocated 12%, 10% and 6%, respectively ”, indicated Coparmex.

In solid data, the economic balance of the COVID-19 pandemic shows that the 79% of companies reported a drop in their revenue, 1,117,584 formal jobs were lost between March and July; and the death of 1,010,857 companies. These businesses represented 2.9 million employed persons.

Faced with the new closure of activities in the Metropolitan Area of ​​the Valley of Mexico, the Employers’ Confederation of the Mexican Republic asked the government to promote a new strategy in which fiscal incentives are implemented, a successful vaccination plan, as well as respect for the State of Law.

“The scenario for 2021 is adverse but it could turn positive if the government acts sensibly, without populism or opportunism, and with a long-term vision”, the organization concluded.

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