Currently, Mexico is expecting a massive economic downturn at the end of the year, but businesses are ill-prepared for the deepest recession in national history. The president promises a quick recovery, but even that seems out of reach, given the resources the country has.

Lopez Obrador has so far refused to make use of loans for measures like business tax relief or rescue packages, and instead pledged to cut 75% of spending on government services.

Analysts from Citibanamex are expecting Mexico's economy to plummet by the end of the year. Still, this week it was observed to have a 6.7% contraction since the beginning of the pandemic, and this is deeper than the Tequila Crisis of 1994.

Earlier this month, Lopez Obrador downplayed the pandemic in the belief the crisis was "transitory."


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Morena for Lopez Obrador

Left-wing ruling party Morena supports Lopez Obrador's proposal for new austerity measures amid backlash from the opposition, who claim that the bill might compromise constitutional mandate for annual spending plans.

Head of Morena and Senator Mario Delgado posted on his social media his full support for Lopez Obrador's bill. He said, "This opens more opportunities to give our country new legal operations to handle emergencies, for the government to act [resourcefully]."

Delgado agreed with fellow Morena party member Lopez Obrador since he believed the funding of the national budget must be utilized for healthcare and credits to businesses.

To be on the safe side, however, he added that the congress would make slight modifications for the bill to appear less unconstitutional.

The bill was seen by many critics and supporters alike as rather controversial. Some people even questioned its constitutionality. Economist at Barclays Marco Oviedo said in an interview that it would only be a matter of checks and balances in the constitution. He added, "An executive with full powers over the public expenditures goes against that spirit."

Furthermore, Oviedo told the media that the bill still needed more modifications, such as more clear definitions about where the funds would be allocated.


Health and Economic Crisis

Critics believe that Lopez Obrador's proposed solution to the pandemic seems to be missing the mark.

The former head of Mexico's social security institute Santiago Levy said that the president's new bill seeks to improve the economy that was better suited for an exchange-rate crisis. She clarified that Mexico was currently in a health and economic crisis.

The effect of the coronavirus pandemic was causing a variety of different crises altogether, so that made things doubly hard to pinpoint where to direct federal efforts and funds, especially when much of the allotted resources are going instead to infrastructure projects and social programs.

However, businesses are asking for financial support like suspensions of tax and social security payments. Lopez Obrador's response to this was that it would merely deplete the national budget and increase public debt.

"It's a different situation," Levy said.

Alfoso Cuellar, manager of the Morena Party, defended Lopez Obrador's efforts by saying he was doing everything in his power to avoid plunging Mexico deeper into debt.

Cuellar did nonetheless admit that the president could afford to spend more of the national budget given the situation. He assured that the money would not go to waste or be stolen by corrupt officials or businessmen. He said, "This time, it's going to be well invested."