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Saturday, May 21, 2022

Modest growth on the horizon for Yucatán’s hard-hit economy

Report: 11,542 businesses in Yucatán closed due to the economic fallout of the COVID-19 pandemic

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Carlos Rosado van der Gracht
Born in Mérida, Carlos Rosado van der Gracht is a Mexican/Canadian blogger, photographer and adventure expedition leader. He holds degrees in multimedia, philosophy and translation from universities in Mexico, Canada and Norway. Sign up for the Yucatán Roundup, a free newsletter, which delivers the week's top headlines every Monday.
Consumers across Yucatán and Mexico continue to see the cost of basic goods rise. Photo: Carlos Rosado van der Gracht

In 2020, Yucatán experienced its worst GDP drop in 50 years.

The 9.1% decline was even worse for the state than the economic crisis of 1995 when Yucatán lost 6.1% of its GDP.

State authorities reported the loss of almost 20,000 jobs in 2020. However, the real number is likely to be much higher. Official data only accounts for formal employment agreements, which in 2018 represented only 40% of the total work force.

According to the same report, 11,542 businesses have closed their doors in Yucatán over the last year due to the economic fallout of the COVID-19 pandemic.

Yucatán Gov. Mauricio Vila Dorsal recently boasted that his administration has led the country in fiscal incentives, employment subsidies and economic support. The governor has repeated on several occasions that despite the severity of the situation, Yucatán will pull through the crisis and come out stronger on the other side thanks to the resiliance of its people and the quality of its infrastructure. 

Yucatan’s once-thriving tourism industry has also been extremely hard hit. The sector has seen a dramatic reduction in cash flow and reservations. 

Archaeological sites in Yucatan have seen a reduction in attendance of nearly 70% compared to 2019, with most of the years traffic funneling into Chichén Itzá

Despite the economic chaos, BBVA Bancomer and the International Monetary Fund, have projected that Mexico will grow its GDP by approximately 3% in 2021. However, both entities cite concerns such as the slow rollout of COVID-19 vaccines and hesitance on the part of private investors to take out loans and start new businesses.

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