The economy is already weak.
Doesn't follow the herd.Opinions expressed by Forbes Contributors are their own.I write about business and investing in emerging markets. The stock market is down 43.6% from its peak on January 17. The global financial crisis in late 2008 caused a massive economic downturn in Mexico the following year, although growth returned quickly in 2010. The carry trade isn’t helping Mexico anymore. The news and stories that matter, delivered weekday mornings.Teddy bears are used to maintain social distancing measures at a restaurant during the gradual reopening of commercial activities in Mexico City on July 26, 2020 At least 8% of Mexico’s economy is in trouble as Americans stay home.This is particularly true for the travel and tourism industry, now whacked by the cancellation of college Spring Break.Hotel occupancy in the state of Quintana Roo, home to popular Caribbean beach getaways including Cancun and Playa del Carmen, is now below 60%, Reuters reported today from Mexico City. Since 2011, I focus on business and investing in the bigI've spent 20 years as a reporter for the best in the business, including as a Brazil-based staffer for WSJ. Nationwide, less than one in 100 people have been tested; the city has administered about 1.5 tests per 100 residents.The city government reports about 80,000 confirmed coronavirus cases and about 9,400 COVID-19 deaths so far.Nationwide, Mexico reported 5,558 newly confirmed coronavirus cases Monday, bring the accumulated total to 485,836. In exchange, they can open at 30% capacity until 10 p.m.Mayor Claudia Sheinbaum said that was to avoid more job losses among bar employees.Similar measures elsewhere have given rise to symbolic food orders — a handful of chips — for customers who really just want a beer or wine.
The longer the most important economic states in the U.S. remain in quarantine, the longer Mexico takes to recover.
The economy is not doing well. Where'd everybody go?
A coronavirus Mexico is no hotbed of new SARS coronavirus cases, but its economy is dealing with a neighbor on near total lockdown.
More cancellations are expected in the days ahead as non-Spring Breakers also cancel trips to a country that, for now, has only 220 cases of COVID-19, the disease caused by the SARS-CoV-2 virus, aka the new coronavirus.Aerial view of Reforma Avenue in Mexico City on March 23, 2020.
Mexico City's government will allow bars to reopen by offering food and operating as restaurants as part of an easing of the coronavirus lockdown and to boost the economy. Anyone caught crossing the border illegally will not be sent to a U.S. detention center but will immediately be deported back to Mexico.
Because of all these unknowns, investors are bailing on Mexico. However, its high population and central geography make Mexico City a different kind of economy … The World Bank Group engagement with the country is structured around a model that provides development solutions adapted to the country, with an integral package of financial, knowledge and convening services. “We expect further rate cuts in the coming weeks or months in order to match the Fed's moves, as well as fiscal stimulus although none has so far been announced,” says Mark Keller, analyst at The Economist Intelligence Unit.Keller says they we will be making further downward adjustments to their 2020 GDP growth forecast in the days ahead.People enjoy a day at the beach in Cancun, Quintana Roo State. “But we also see the potential for a powerful recovery given this deep decline.”It will be a huge headwind for Mexico to start mandating quarantines. (Photo by “We think U.S. GDP could decline by 10% or more in the second quarter, edging close to the record 13% decline seen in 1932,” says Joseph Amato, chief investment officer for equities at Neuberger Berman in New York.A U.S. recession will also crush Trump’s stock and job markets, meaning less demand for goods made in Mexico.The current demand shock also requires companies to hold cash to prepare for emergency revenue destruction; and requires governments to spend, often giving up on any promises made to investors of fiscal conservatism. Those who are born in the city, particularly those whose families have resided there for several generations, are collectively known as chilangos. The peso is at its worse level in … Among chilangos, however, there exist deep socioeconomic and ethnic divisions. The peso is at its worse level in over five years, now trading over 25 pesos to the dollar.
But Sheinbaum was emphatic, saying: “I repeat, the bars are not opening.”New guidelines that went into effect Monday also allow movie theaters, swimming pools and museums in Mexico City to open at 30 percent of capacity.The mayor delivered her daily press briefing from home on Monday after she announced she was isolating after one of her top officials tested positive for the novel coronavirus.The city government has been performing slightly more tests than the strikingly low level of testing done nationwide. The news has thrust Mexico's economy into the global spotlight. Former holder of the FINRA Series 7 and 66.