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Mexican President Andres Manuel Lopez Obrador on Wednesday, August 26, defended his handling of the pandemic-stricken economy after official figures confirmed a record plunge in gross domestic product (GDP).
The country’s economy, the second largest in Latin America after Brazil’s, contracted by 17.1% in the 2nd quarter of the year from the previous quarter, the national statistics institute said in an updated estimate.
That represented only a slight improvement from the 17.3% drop it reported last month in a preliminary snapshot.
Year-on-year, GDP fell 18.7%, the institute said on Wednesday.
Some analysts have criticized Lopez Obrador for not spending more to boost the economy, particularly the private sector, in the face of the coronavirus outbreak.
The leftist leader says his priority is helping ordinary Mexicans with social aid and loans.
“Contrary to the opinions of many, we decided to support from below, instead of above, directly giving support to the people,” he told reporters, adding that such measures would boost consumer spending.
Mexico has registered 61,450 coronavirus deaths – the world’s 3rd highest fatality toll, after the United States and Brazil.
The government imposed lockdown measures at the end of March and started gradually reopening the economy in June.
Mexico’s central bank warned on Wednesday that the economy is in danger of shrinking by 12.8% for the whole of 2020 if the pandemic worsens and demand and supply suffer sustained damage.
On the other hand, if a tentative economic recovery seen in June continues, then the drop in GDP could be limited to up to 8.8%, the Bank of Mexico said.
The outlook for 2021 is less gloomy with economic growth of up to 5.6% expected in the best-case scenario, it said.
Earlier this month, the central bank cut its key interest rates for the 10th consecutive time to boost the struggling economy. – Rappler.com