Thursday, May 21, 2009

Not Dark Yet, But It's Gettin' There

We didn't go to business school, but this sounds like the opposite of good news, no?

Mexico's economy shrank 5.9% in the first quarter from the fourth quarter of last year -- showing the economy in its steepest decline since the depths of the country's 1995 peso crisis.

That translates to an annualized quarter-on-quarter drop of 21.5%. Compared to a year ago, gross domestic product fell by 8.2%, the country's statistics office said on Wednesday.

The worst may not be over for Mexico, which faces a dramatic fall in tourism because of the recent outbreak of A/H1N1 flu, on top of slumping demand from the U.S.

There's an old saying, that when the US sneezes, Mexico catches a cold. This turns out to be especially true if the US thinks it's sneezing because of swine flu.

Foreign visitors may generate $4 billion less in revenue this year than the $13 billion last year, says Tourism Minister Rodolfo Elizondo. The travel industry, Mexico's third biggest source of foreign income, employs 2 million.

Hotels in the resort town of Cancún are running at 29% occupancy during May compared to the usual average 74%, according to the regional hotel association

In light of all this, it does seem silly that the Mexican government has declared war on the one industry operating in the red black these days.

1 comment:

Lazlo Lozla said...

I think you meant "operating in the BLACK".
And we have a powerful neighbour that wants us to have that war, haven't you heard?