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Mexico's economy laid low by fears of flu

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Mexico's economy laid low by fears of flu

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Mexico City has re-opened for business this week but there isn’t much money changing hands, a symptom of the fear of swine flu.

In many restaurants and shops in the capital on Monday, staff outnumbered customers. As for public venues like museums, parks and theatres, they remain shut. Where possible, companies are asking employees to work from home on the advice of Mexico City’s mayor. On Sunday, Mayor Marcelo Ebrard called on businesses to cut back as much as possible without bringing all economic activity to a halt. This week, he said, would be critical. Schools across the country will stay closed until May 6 as families stay at home to limit human contact and the threat of catching the virus. Despite a 20-million strong population, Mexico City resembles a ghost town. Swine flu has struck at a time when the Mexican economy is already in poor health. Like most others it has been laid up with the effects of the global economic crisis and it has been hit by the drop in orders from its biggest customer, the United States. Some analysts predict Mexican GDP will fall by 4.5 percent this year, with the epidemic alone being responsible for 0.6 percent of that contraction. Even before swine flu became a household phrase, retail figures were on a steep downward slope, down 8.5 percent for the month of February. Perhaps the biggest threat now to Mexico’s economy is to tourism. Last year the tourist industry was worth some 10 billion euros and was managing to hold its own this year despite the global downturn. That resilience is almost certain to be dented by holiday-makers’ concerns, even more so should a major western government impose a travel ban.