Mexico tallying the economic cost of big earthquake

Mexican government officials are tallying up the economic losses of the magnitude 7.1 earthquake that caused widespread damage in the capital, as the number of buildings considered in danger rose to 500.

The death toll in the quake rose to 331, with 192 of those deaths occurring in Mexico City.

Authorities pledged a return to normality, but many streets in the capital were still blocked by construction equipment and recovery teams looking to extract the last remaining bodies from the rubble.

The city government announced a plan of reconstruction loans and aid for apartment dwellers who lost their homes, and may lose them as teetering buildings are pulled down. But for city businesses like the downtown restaurant Guapa Papa, the result is already all too clear.
 

Sitting in the entrance of his restaurant yesterday, surrounded by caution tape, Antonio Luna said: "This is a bust. It's already closed due to structural damage to the building."

He had to let go the three dozen employees at the 1950s- themed restaurant and is just trying to salvage whatever furniture and equipment wasn't damaged.

"In the end the company let everyone go because it couldn't continue having expenses," Luna said.

Moody's Investors Service said in a report Monday that the September 19 earthquake that has killed at least 326 people in the capital and nearby states "has the potential to be one of Mexico's costliest natural catastrophes."

Alfredo Coutino, Latin America director for Moody's Analytics, said they were still collecting data on losses, but a preliminary estimate was that the earthquake could knock 0.1 to 0.3 percentage point off growth in Mexico's gross domestic product in the third and fourth quarters.

For the full year, the impact on gross domestic product should be about 0.1 percentage point. "The impact on the year's growth will be small, particularly considering that the reconstruction work will compensate for some of the total loss in activity during the fourth quarter," Coutino said.

Money is expected to pour into the economy as Mexico City and the federal government tap their disaster funds. As of June, the city's disaster fund stood at 9.4 billion pesos (more than $500 million), making it slightly larger than the national fund, according to a Moody's Investors Services report.

Of course, the national fund also has to deal with recovery from the even stronger Sept. 7 quake that has been blamed for nearly 100 deaths, mostly in the southern states of Oaxaca and Chiapas.

There will be months of work ahead from demolition to repairs and reconstruction.

Mexico City Mayor Miguel Angel Mancera said that 360 "red level" buildings would either have to be demolished or receive major structural reinforcement. An additional 1,136 are reparable, and 8,030 buildings inspected so far were found to be habitable.

At least 38 buildings, including apartments and office buildings, collapsed during the earthquake.

Mexico's education ministry also has 1.8 million pesos to spend on school repairs. In Mexico City alone, only 676 of the city's 9,000 schools had been inspected and cleared to resume classes, Education Secretary Aurelio Nuno said today.