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Mexico: Dependence on tourism and manufacturing creates economic challenges as US demand falls

“Coronavirus pain: Declining US consumer demand hurts Mexico”, 17th April 2020

…The lockdown has ground bustling city centres and towns to a halt. Businesses have sent employees home. Restaurants, shops, and shopping centres have closed. And, while a vast sector of informal workers who live day-to-day continue to peddle goods and food in markets and roadside stalls, sales have plummeted.

But the sudden drop in demand within Mexico - where the IMF predicts an economic contraction of 6.6 percent in 2020 - is just part of the coming crisis.

Global crude oil prices and remittances from Mexican workers abroad - which totalled an estimated $36bn last year - are down. And Mexico's dependence on tourism and manufacturing means that lower US demand for everything from cars and refrigerators to beach holidays will further strain Latin America's second-biggest economy…

Mexico's auto industry, which generally benefits from integration with US and Canadian supply chains, is feeling the blow. Auto production in March dropped 24.6 percent compared with the same month a year earlier, while exports fell 11.9 percent, according to Mexico's national statistics institute, INEGI. Several carmakers…extended closures at manufacturing plants across North American countries because of the global pandemic and related sharp drop in demand…