Mexico City sees 8,500 business closures

15:18, December 11, 2009      

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Around 8,500 businesses in Mexico City have closed in the first 10 months of this year, the city's business chamber (Canaco-DF) told a televised press conference on Thursday.

The figure represents 8 to 10 percent of the city's businesses, with auto dealers, white goods retailers and furniture shops being the worst hit, according to Arturo Mendicuti, president of the business chamber.

Mexico's economy declined by 10.3 percent in the second quarter as a result of the worldwide economic downturn, coupled with the outbreak of A/H1N1 flu, with Mexico City as the epicenter. These factors scared away tourists and closed businesses and public facilities that usually bring large numbers of customers during April and May.

"We are hoping that tax increases would not translate into an inflationary bubble and prices would return to a normal level in late January or early February," Mendicuti added.

The Mexican government raised taxes in its budget, published in November. The taxes will go into effect in January. According to its forecast, Mexico's economy will recover in 2010 as demand for Mexican goods picks up in the United States, which usually consumes around 80 percent of Mexican-made exports.

Source: Xinhua
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