May 29, 2020
1. Government warns that the New Normal will include restrictions
On May 31, the “National Day of Healthy Distance” will end, which included restrictions on mobility and the operation of only essential economic activities, among others. There are currently 81,400 cumulative positive cases in Mexico, 16,315 active cases and 9,044 deaths.
During a confrontation between state authorities and the federal government over economic reopening measures, Undersecretary for Promotion and Prevention Hugo Lopez Gatell warned that the “New Normal” will take place under the guidelines of a federal traffic light system and that state authorities will not be able to intervene in these provisions. Every Friday the updated traffic light will be presented. The report as of May 29 is that all states in the Republic, except Zacatecas, are at red lights and will only be able to carry out essential activities.
2. Banxico forecasts 8.8% drop in Mexico’s GDP
During the Bank of Mexico Quarterly Report presentation of, the governor of the institution Alejandro Díaz de León explained that one of the planned scenarios is that this year could have a contraction of up to 8.8% of GDP, which would represent the largest since 1932, while recovery would occur until 2021 when growth of 4.1.% is expected.
The Bank of Mexico reported increases in inflation, specifically in the food category, which in the first half of May closed at 7.64% as some foods presented increases of up to 90%. National inflation for May was estimated at 2.83%. President Andres Manuel Lopez Obrador reacted to the Bank of Mexico’s Quarterly Report and assured that he respects its autonomy but that he does not agree with the organization’s projections.
El Economista: Banxico pronostica caída del PIB de hasta 8.8% en 2020
3. President Andrés Manuel López Obrador recognizes historic tax collection
Mexican President Andrés Manuel López Obrador said tax revenue increased by 2.5% to 3% over last year, which meant “100 billion more pesos” (USD$ 4.5 billion) for the government, which he considered “a miracle” due to COVID-19 pandemic status.
This week the Tax Administration Service (SAT) reported that it reached an agreement with Walmart of Mexico, after the government institution issued in February a request for payment of taxes arising from the sale of a restaurant chain, the agreement included the liquidation of $8.2 billion pesos (USD$ 370 million) by the company. On instructions from the President of Mexico, SAT has undertaken a strategy to ensure the payment of debts and taxes by large taxpayers.
El Economista: Más empresas se están poniendo al corriente con el SAT: AMLO
4. Violence against women in Mexico rebounds during isolation
This week a student from the Autonomous University of Nayarit was murdered in her home. Various organizations demanded that the alleged femicide be clarified. According to figures from the Executive Secretariat of the National Public Security System (SESNSP), there were 10% less “feminicides” in April compared to the previous month, but the crime of “intentional homicide” committed against women increased by 14.1%.
Amnesty International Mexico’s Director, Tanía Reneaum, says that during March there was an increase in telephone complaints about domestic violence, which coincided with the start of social isolation measures. President Andres Manuel Lopez Obrador has been criticized by feminist organizations because of his statements in which he has said that violence against women has not increased and that some of the reports made on the phone “are false”.
Animal Político: Abril, el mes con más homicidios dolosos de mujeres desde 2015
5. Withdrawl of retirement funds rises due to Covid-19 crisis
According to the President of the National Commission of the Retirement Savings System (Consar), Abraham Vela Dib, the retirement funds registered a historical figure in the withdrawal of partial amounts due to unemployment in April, totaling 1.2 billion pesos (USD$ 54 million), to accumulate 5.1 billion pesos (USD$ 230 million) so far this year in the midst of the crisis by Covid-19.
On the other hand, according to figures from the Bank of Mexico, Mexicans’ assets abroad increased USD$5.5 billion, representing the largest number of assets deposited outside the country since 2018. Experts believe that due to the COVID-19 crisis, investors recomposed their portfolios.