The Daily Business Digest

The Mexican economy was running at high speed till two years back at the height of record high crude oil prices, which were above the 100 dollars a barrel mark. But the global economic crash since 2008 beginning has also pulled down the crude oil prices substantially to less than 70 dollars.
And in the last one year the crude oil prices have been averaging below 65 dollars which in turn pulled down the Mexican economy into deep recession. The government has been forced to seek the help of IMF few months back to stay afloat.
Now, it has gone ahead with closing down of a state-run energy firm, due to mounting losses. The energy distribution firm was closed down with immediate effect, that can affect the lives of over 40000 employees, and another 150000 people dependent on them. The company has been making loss of over 20 billion US dollars last year and with no scope for returning back to profitability, the government was forced to take the drastic measure of closing down the firm as a whole.
Still the Mexican government will be running on huge budget deficits, and it has to take more such tough measures in the coming months, in order to stay afloat. The other alternative for the Mexican economy to recover back, is only by selling crude oil at over 90 dollars a barrel, which does not seem possible at least for another three months.