Mexico's economy has fared better than other nations -president

The pandemic lockdown threw Mexico's economy, Latin America's second largest, into the deepest slump since the Great Depression, shrinking 17% in the second quarter. "The economy's contraction, despite the global disaster, was 10.4% during the first half of the year.

Mexican President Andres Manuel Lopez Obrador defended his handling of the economic fallout from the coronavirus pandemic on Tuesday, arguing in a major speech that the economy has fared better than some of its peers. The pandemic lockdown threw Mexico's economy, Latin America's second largest, into the deepest slump since the Great Depression, shrinking 17% in the second quarter.

"The economy's contraction, despite the global disaster, was 10.4% during the first half of the year. But despite the collapse the damage was smaller than in Italy, Spain, France and the United Kingdom," Lopez Obrador said in his state of the union address from the ornate national palace. Lopez Obrador has resisted pressure to borrow to support the economy or bail out companies on the brink of collapse, while picking fights with some businesses.

"We have faced the pandemic and we are going to get out of the economic crisis without taking on additional external debt and without allocating public money to immoral bailouts," he said. In contrast, Brazil's economy contracted 9.7% in the second quarter as its government launched a spending program to cushion the pandemic's impact.

Lopez Obrador has forecast that the economy will follow a V-shaped trajectory, meaning a sharp slump followed by an equally sharp recovery. "Fortunately this is happening, the worst is over and now we are recovering. Lost jobs are already recovering, production is slowly returning to normal and we are already beginning to grow," he said.

The economy advanced 8.9% in June compared to May, and after losing some 1.1 million tax-paying jobs between March and July recovered some 90,000 jobs in August. But the economy contracted 13.2% in June compared to the same month last year and the central bank warns that Mexico's economy could contract by almost 13% this year.