MEXICO CITY (Reuters) – The bleeding of formal jobs in Mexico should end in July and some employment gains are expected no later than August, the president said on Sunday, as he aims to revive the economy following months of coronavirus-led contraction.
Widespread confinement measures in place since late March have dealt a major blow to Latin America’s second-biggest economy, as it suffers through its deepest recession in decades.
President Andres Manuel Lopez Obrador said in an eight-minute recorded video message on Sunday that he expects a “fast recovery,” noting that after the workforce shed about 900,000 formal jobs in April and May, he expects to lose only 70,000 in June.
“We will stop the fall,” he said, seated behind his desk at the ornate national palace and wearing a casual guayabera shirt.
If the economy does not add formal jobs in July, Lopez Obrador predicted there will be such gains in August, referring to jobs registered with social security institute IMSS.
Formal jobs stem from contracts and include defined pay and tax obligations, while informal jobs mostly operate in cash and outside the law.
Slightly more than half of Mexico’s workforce is thought to be informal.
The government has previously announced a gradual economic reopening from June 1, allowing “essential” industries including carmaking and mining to resume operations, but increasing novel coronavirus infections and deaths could dampen the recovery.
Lopez Obrador, a leftist populist in his second year in office, also heralded a reworked North American trade pact with Canada and the United States set to go into effect on July 1.
“This will mean more investments, this will mean more jobs, more well-being for Mexico,” said Lopez Obrador.
He added that he expects remittances this year through June from Mexicans in the United States to relatives back home to have grown by 10%.
(Reporting by David Alire Garcia; editing by Grant McCool)