Mexican government officials are tallying up the economic losses of the magnitude 7.1 earthquake that caused widespread damage in the capital.
Moody’s Investors Service said in a report Monday that the Sept. 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 (GDP) in the third and fourth quarters.
For the full year, the impact on GDP should be about 0.1 percent. “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,” Señor 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 Nuño said Monday.
AIR Worldwide, a Boston-based catastrophe modeling consultant, provided a wide range for industry-insured losses, but noted they would be only a small part of the total economic losses. It put the insured losses at between 13 billion pesos ($725 million) and 36.7 billion pesos ($2 billion).