Development challenges in the face of COVID-19 in Mexico. Socio-economic overview

Jun 22, 2020

The COVID-19 pandemic, in addition to health challenges, has imposed enormous socio-economic development challenges on Mexico. Throughout the document, it is argued that the weak economy and inequalities that prevailed before the arrival of COVID-19 in Mexico are exacerbating the effects of the lockdown implemented to contain the virus and reducing the response capacity of the Mexican government. It also analyzes the effects that the pandemic has had on (i) workers’ income, both formal and informal; (ii) poverty levels; (iii) private consumption; (iv) industrial production; (v) oil prices; (vi) exports; and (vii) income from remittances. Finally, based on these analyses, a series of recommendations are issued, aimed first at protecting household incomes and sources of employment.

Secondly, the recommendations focus on reducing risks that threaten the stability of the financial system, in order to promote a faster recovery. Thirdly, guidelines for strengthening the government's response capacity are proposed. Fourthly, the recommendation to favor policies that incorporate the gender perspective is made. Finally, evidence-based, gradual re-opening proposals are issued, which avoid contagion peaks and longer lockdown periods that would deepen the current recession.

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