June 5, 2020
1. Mexico gradually restarts economic activities
The traffic light system for economic reactivation signalled that 31 of 32 states remain at high risk of COVID-19, so only 18,560 companies in the automotive, mining and construction sector have resumed activities. Currently, there are 105,680 confirmed cases, 18,377 active confirmed cases, and 12,545 deaths in Mexico.
President Andrés Manuel López Obrador also resumed travelling outside the capital to the southeast of the country to inaugurate the works of the Maya Train, one of the emblematic projects of his administration. On the other hand, Jarbas Barbosa, deputy director of the Pan-American Health Organization, asked the Mexican government not to rush the reopening of economic activities, as this could lead to a new spike in cases.
2. Mexico, the U.S. and Canada conclude regulatory negotiations for USMCA
The Secretariat of the Economy reported that the three signatories to USMCA have concluded standard regulation negotiations that will define how the parties involved would adopt measures and regulations to implement the United States, Mexico and Canada Agreement.
Standard regulations are critical on sections of the agreement regarding rules of origin, procedures, textile goods and customs administration. On the other hand, the Standing Committee of the Mexican legislature will convene extraordinary sessions to approve various legal reforms necessary for the legal enactment of the USMCA, including the Quality Infrastructure Act, the Industrial Property Law, the Customs Law among others.
3. Financial Intelligence Unit blocks 1,939 bank accounts connected to the Jalisco Cartel
Santiago Nieto Castillo, chief of the Financial Intelligence Unit of the Ministry of Finance and Public Credit, reported that in coordination with the U.S. Drug Enforcement Agency (DEA) carried out “Operation Agave Azul”, in which 1,939 accounts of companies related to the Jalisco New Generation Cartel were blocked.
1,770 of the blocked accounts were individual, 167 belonged to companies and 2 were trusts. Nieto mentioned that the Financial Intelligence Unit is analyzing the details of these accounts that are run by financial operators, cartel family members, lawyers and even public servants operating on behalf of the Jalisco Cartel. These names have already been reported to the Attorney General’s Office.
4. Peso depreciation increases Mexico’s public debt
According to data from the Secretary of Finance and Public Credit, the exchange rate depreciation caused by uncertainty related to the COVID-19 pandemic and the oil price crash, led to a spike in the country’s public debt, which ended April at MXN $12.88 trillion (USD $596.6 billion)
The Secretary of Finance and Public Credit, Arturo Herrera, recognized the rise in public debt, even though the country has not formally acquired new debt; and attributed the rise to exchange rate volatility. In addition, he stated that due to this financial landscape, the federal government has been prudent and selective regarding the implementation of fiscal stimulus.
5. 12 million Mexicans left without income due to COVID-19 crisis
According to data from a survey conducted by the National Institute of Statistics and Geography (INEGI), the Economic Participation Rate was reduced by 12.3% in April compared to March, representing 12 million people who are not receiving income.
The INEGI explained that the decline in the rate was caused by the suspension of economic activities resulting from the COVID-19 pandemic. Of the 12 million Mexicans who were left without income, about 10 million belong to the informal economy sector and 2 million to the formal sector.
El Economista: Covid-19 dejó sin ingresos a 12 millones de mexicanos