Mexico is facing an economic crisis of major proportions, as the outbreak of the H1N1 virus in April has exacerbated the impact of the global economic crisis on the country.
In a press conference in mid-May, Finance Secretary Agustin Carstens reluctantly acknowledged that Mexico could experience a contraction of 5.5% of GDP this year, bringing back memories of the crisis that followed the 1994 peso devaluation.
The Mexican economy had already been dragging because of the downturn in global economic activity, particularly in the U.S.
"At the start of the year, the federal government was projecting that GDP could increase by 1.8% in 2009," said the Mexico City daily newspaper Excelsior. But on May 19, Carstens told reporters: "The annual decline in GDP for 2009 will have to be revised to about 5.5%."
The downward revision is to some extent due to the recent outbreak of the H1N1 virus, which forced economic activity to come to a near halt at the end of April and into May.
Some analysts predict that the economic downturn could rival the crisis in the mid-1990s, when a sudden peso devaluation caused the Mexican economy to plummet