Mexico’s exports could decline by US $1.37 billion due to the outbreak of the novel coronavirus known as Covid-19, according to the United Nations Conference on Trade and Development (UNCTAD).
The intergovernmental body said in a report that the slowdown of manufacturing in China due to the outbreak of Covid-19 is disrupting world trade and could result in a $50-billion decrease in exports across global value chains.
“Because China has become the central manufacturing hub of many global business operations, a slowdown in Chinese production has repercussions for any given country depending on how reliant its industries are on Chinese suppliers,” UNCTAD said.
According to UNCTAD estimates, Mexico will be the eighth most affected economy after the European Union, the United States, Japan, South Korea, Vietnam, Singapore and the United Kingdom.
“In addition to grave threats to human life, the coronavirus outbreak carries serious risks for the global economy,” said UNCTAD Secretary-General Mukhisa Kituyi.
“Any slowdown in manufacturing in one part of the world will have a ripple effect in economic activity across the globe because of regional and global value chains.”
UNCTAD said its estimates showed that the most affected sectors would include precision instruments, machinery, automotive and communications equipment.
In Mexico’s case, UNCTAD is predicting that the automotive sector will take the biggest hit, with exports forecast to fall by $493 million.
The next most affected sectors are predicted to be electrical machinery, with a forecast export decline of $341 million; “various” machinery, $228 million; communications equipment, $71 million; office machinery, $58 million; precision instruments, $57 million; wood products and furniture, $52 million; rubber and plastics, $26 million; and metals and metal products, $23 million.
UNCTAD noted that the estimated effects of Covid-19 are subject to change depending on the containment of the virus and/or changes in sources of supply. As of Friday morning, there were five confirmed cases of Covid-19 in Mexico and 35 possible cases.
Source: Milenio (sp)