On Sunday, the President of Mexico had announced a plan to help boost the Mexican economy out of the COVID-19 crisis. President Andres Manuel Lopez Obrador promised to provide assistance to the poor and create jobs. However, his vow for fiscal discipline had resulted in criticism that the response is insufficient, says an article.

AMLO's Promise

AMLO promised to create 2 million jobs in nine months. Also, he plans to give a boost to small businesses and give out housing loans for Mexicans. Also, he plans to tighten the restrictions on the public sector to prevent excessive debt.

Global Governments

Governments from different parts of the world have released spending vows to minimize the damage of the COVID-19 crisis to their economies. These nations include the United States of America, Mexico's number one trading partner. The US had recently announced a $2-trillion package.

Using a Budget Stabilization Fund and Public Trust Funds to Shield the Poor

AMLO's approach to saving the Mexican economy amid the COVID-19 crisis is the usage of a budget stabilization fund and public trust funds to shield the poor from the potential decline. Experts are forecasting this decline as severe.

According to AMLO, COVID-19 is a temporary and transitory crisis. He gives hope through a televised speech that normality will soon come, and the COVID-19 will be defeated. He reassures everyone that the economy will be reactivated at the passing of the pandemic.

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Funds

In the previous week, AMLO stated that approximately $10 billion would be available for multiple rainy day fund. According to the finance ministry, the economy's buffers included a stabilization fund of more or less $6.6 billion from the last day of 2019.

Investment to the Energy Sector

An investment in the energy sector amounting to $13.5 billion is to be announced next week. This move will help give the Mexican economy a boost. Some private analysts predict that this will contract by up to 10% this year.

This total is less than the proposed $92-billion energy sector investments in the private sector.

Fighting Recession with a Stimulus Package

AMLO's speech had coincided with the increasing demands for his government to follow the United States of America and other European countries with a significant stimulus package to combat a recession.

According to a political analyst in Mexico Viri Rios, the measures that AMLO had planned are insufficient to combat this type of recession.

The Coparmex's head of employers, Gustavo de Hoyos, expressed his disagreement with the president's plan for the Mexican economy. De Hoyos stated that there are no significant measures to combat the economic decline brought by the COVID-19 crisis.

Based on the latest estimate of the Mexican government, the economy could contract by up to 3.9% this year. However, AMLO expressed his disagreement with this prediction. He calls for more optimism on the Mexican economy, which was already contracting in 2019.