Mexico’s economy contracted 8.5% in 2020, the largest single-year drop since 1932 and the second consecutive year of economic contraction, worsened due to the Covid-19’s pandemic. Latin America’s second economy, the gross domestic product grew 3.1% in the final three months of the year. Growth in the second half of 2020 allowed Mexico to beat projections earlier in the year of a double-digit contraction. The second trimester of the year when the pandemic took hold and much economic activity was frozen saw a contraction of 18.7% compared to the same period a year earlier. 2020 economic plunge is the reflection of not only the devastating effects of the virus pandemic but also the lack of preparedness and insufficient policy response of the current administration.
Part of the economy gradually began to open in June and the economy grew 12% in the third quarter, but remained 8.6% below the same period a year earlier. Much of the improvement had to do with U.S. economic activity picking up. Mexican economy was already in a recession before the pandemic struck. The government’s decision of not implementing a rescue package to support businesses and mitigate the loss of employment took a heavy toll in terms of business mortality and well-being deterioration. Mexico ended 2020 with 840,000 fewer jobs than it had in February before the pandemic hit.