The other unstoppable epidemic
Summary
More than 451 thousand companies in Mexico are in a technical stoppage: they have not opened their doors during the confinement or have made any other effort to continue operating because of different reasons. It is the closest thing to bankruptcy. There are still 47% of companies (especially SMEs) that have a probability greater than 50% of closing their doors permanently in the coming months, a percentage that represents approximately 60,283 companies. At least two direct effects of company bankruptcy are identified in the short and medium-term: job losses and company insolvency. The impact on the past due portfolio has already begun to show itself in the SME delinquency index, which shows an upward trend, increasing from 5.9% to 6.4% from February to May of this year. For its part, formal and informal employment has fallen to its lowest rates in recorded history.
