Mexican economy almost hits bottom

Mexican officials confirmed earlier this month that the country’s economy is under recession. Figures released today by the government have shown that Mexico’s economy has hit its lowest point in many years:

Mexico's economy shrunk 8.2 percent in the first quarter, and the finance minister predicted GDP would drop 5.5 percent in 2009, as the country braced for its worst year in more than a decade.

The recession in the United States has hit exports hard, reduced the flow of money sent home by migrants, and dealt a blow to tourism, all key contributors to Mexico's one-trillion-dollar economy.

The latest figures do not take into account the impact of A(H1N1) flu, which led to a virtual shutdown of parts of the country and scared off tourists.

The decrease in GDP s the worst since the so-called “Tequila Crisis” of 1995 when the economy contracted, the peso was sharply devalued, inflation skyrocketed to 50%, and thousands lost their jobs. According to some analysts, the worst is yet to come as second quarter GDP is expected to falling and the recession will continue. “We are looking at a lost year,” said one financial analyst to Reuters.

Image- Money & Co.
Online Sources- The Telegraph, Bloomberg, AFP, The Latin Americanist, forbes.com