MEXICO CITY (Reuters) – 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 Mexico’s economy will follow a V-shaped trajectory, meaning a sharp slump followed by an equally sharp recovery.
Mexico’s central bank has warned the economy could contract by almost 13% this year.
Some Mexicans feel let down by the government. In front of the National Palace in the capital various labor groups protested the government’s lack of support for workers during the pandemic.
Flora Aco, an activist from the feminist group Bread and Roses, said the government should have offered a “quarantine salary” to millions who work in Mexico’s informal economy and were put out of work by widespread lockdowns.
“They were left in complete instability,” said Aco, one of several hundred protesters by the National Palace.
(Reporting by Daine Beth Solomon and Anthony Esposito; Editing by David Alire Garcia, Andrea Ricci and Leslie Adler)