Mexico’s National Institute of Statistics and Geography (INEGI) is expected to publish first-quarter GDP data this Thursday. The data will confirm what all analysts already fear: the Mexican economy has already entered a recession, which is technically understood as two consecutive quarters with a drop in activity.

In the fourth quarter of 2019, Mexican GDP fell by 0.1 percent, and the consensus among analysts consulted by Reuters was an additional 1.7 percent decline between January and March.

Worse still is that this period does not include the lockdown measures imposed by the Mexican administration in April.

As explained in the last MAPFRE Economics Outlook Report, Mexico is being rocked by two simultaneous shocks: first, the global pandemic and, second, the increasing downward pressures on the crude market. “These phenomena,” the report explains, “will impact the Mexican economy differently, given its enormous commercial and industrial integration with the United States, and its major fiscal and industrial dependence on the energy sector.”

So much so that MAPFRE Economics’ economic forecast for the Mexican economy points to a 3.9 percent drop in GDP in its baseline scenario, which could become a collapse of up to 12.5 percent if the situation worsens toward the stress baseline scenario. In the first scenario, Mexico would be able to recover almost all the lost growth next year, with a 3.2 percent rebound. In the second, it could only recover slightly less than half the lost activity, with a 5 percent rebound.

According to MAPFRE Economics, the COVID-19 crisis will have “effects on both supply and demand in the Mexican economy. On the supply side, temporary dislocation of US value chains and trade disruption will continue to damage the manufacturing sector. On the demand side, falling investment due to the unprecedented uncertainty, combined with waning confidence among producers and consumers and lower household income, will limit domestic demand. Given the border closures and lockdown measures in place, export demand will not help mitigate this situation either.”

To further complicate matters, headroom in Mexico’s economy to launch public stimulus programs like those seen in other countries is more limited, among other reasons due to its tax receipts being largely dependent on oil revenue.