AFP, Mexico City :
The earthquake that turned huge swathes of Mexico City into a disaster zone last week took a toll on the country’s economy, but analysts say it will bounce back fast when rebuilding starts.
The teeming city of 20 million people ground to an eerie halt after the September 19 quake, which killed more than 340 people across five states and the capital.
The earthquake caused some $2 billion in damage, together with an earlier quake this month, according to the Mexican government.
That will inevitably stunt the growth of Latin America’s second-largest economy for the third quarter. Private bank Cristianamente predicts GDP will shrink by 0.35 percent.
But the downturn will be short-lived, economists say.
Ironically, natural disasters such as earthquakes and hurricanes are often followed by an economic uptick in the medium term, as money pours into reconstruction and creates jobs.
“There will be a very short-term (negative) impact. But in general economic activity is already returning to normal,” said economist Rafael Camarena of Santander bank, who has kept his growth forecast for the Mexican economy at 2.5 percent for 2017.
The government has $500 million in an emergency relief fund, and President Enrique Pena Nieto has pledged money and special low-interest loans for rebuilding.
“While it’s hardly a crumb of comfort at this time, the reconstruction effort should help the economy to regain some of its lost output over the final months of the year,” said the consultancy Capital Economics.
Mexico City, whose rubble-strewn streets looked like the set of a post-apocalyptic movie after the 7.1-magnitude quake, is slowly returning to its usual bustle.
“We don’t have many customers, but we’re here, working. Let’s just hope there are no more earthquakes or hurricanes,” said restaurant employee Fernando Flores in the trendy but hard-hit Roma neighborhood.
The earthquake hit on the anniversary of another one in 1985 that killed more than 10,000 people and caused GDP to plunge by an estimated 2.39 percent.
Many Mexicans worry the economic chaos will repeat itself.
But analysts downplayed that fear.
The earthquake that turned huge swathes of Mexico City into a disaster zone last week took a toll on the country’s economy, but analysts say it will bounce back fast when rebuilding starts.
The teeming city of 20 million people ground to an eerie halt after the September 19 quake, which killed more than 340 people across five states and the capital.
The earthquake caused some $2 billion in damage, together with an earlier quake this month, according to the Mexican government.
That will inevitably stunt the growth of Latin America’s second-largest economy for the third quarter. Private bank Cristianamente predicts GDP will shrink by 0.35 percent.
But the downturn will be short-lived, economists say.
Ironically, natural disasters such as earthquakes and hurricanes are often followed by an economic uptick in the medium term, as money pours into reconstruction and creates jobs.
“There will be a very short-term (negative) impact. But in general economic activity is already returning to normal,” said economist Rafael Camarena of Santander bank, who has kept his growth forecast for the Mexican economy at 2.5 percent for 2017.
The government has $500 million in an emergency relief fund, and President Enrique Pena Nieto has pledged money and special low-interest loans for rebuilding.
“While it’s hardly a crumb of comfort at this time, the reconstruction effort should help the economy to regain some of its lost output over the final months of the year,” said the consultancy Capital Economics.
Mexico City, whose rubble-strewn streets looked like the set of a post-apocalyptic movie after the 7.1-magnitude quake, is slowly returning to its usual bustle.
“We don’t have many customers, but we’re here, working. Let’s just hope there are no more earthquakes or hurricanes,” said restaurant employee Fernando Flores in the trendy but hard-hit Roma neighborhood.
The earthquake hit on the anniversary of another one in 1985 that killed more than 10,000 people and caused GDP to plunge by an estimated 2.39 percent.
Many Mexicans worry the economic chaos will repeat itself.
But analysts downplayed that fear.
