Mexico tallying the economic hit

MEXICO CITY -- Mexican 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 in need of removal or major repairs rose to 500.

The death toll in the quake rose to 333, with 194 of those deaths 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. Mayor Miguel Angel Mancera said 40 to 50 people were still considered missing.

The city government announced a plan of reconstruction loans and aid for apartment dwellers who lost their homes or who may lose them as teetering buildings are pulled down.

But for city businesses such as the downtown restaurant Guapa Papa, the result is already all too clear.

Sitting in the entrance of his restaurant Monday, 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 he 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.

Mancera said the city, in alliance with private developers, would handle repairs on buildings that needed touch-ups or minor structural work to be habitable. He offered low-interest loans to apartment owners whose buildings would have to be demolished and rebuilt.

However, it is unclear to what extent the city can force owners to demolish buildings. Some that were damaged in a deadly 1985 earthquake are still standing, in part because court challenges can stretch on for years.

Moody's Investors Service said in a report Monday that the Sept. 19 earthquake that caused damage and deaths 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 the firm was still collecting data on losses, but a preliminary estimate was that the earthquake could knock 0.1 percentage point to 0.3 percentage point off growth in Mexico's gross domestic product in the third and fourth quarters.

For the full year's gross domestic product, the effect should be about 0.1 percentage point, Coutino said.

"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 more than $500 million, making it slightly larger than the national fund, according to a Moody's Investors Services report.

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, officials said.

Mancera said 500 "red level" buildings would either have to be demolished or receive major structural reinforcement. An additional 1,300 are reparable, and about 10,000 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 about $100,000 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 Monday.

AIR Worldwide, a Boston-based catastrophe modeling consultant, provided a wide range for industry-insured losses but noted that they would be only a small part of the total economic losses. It put the insured losses at between $725 million and $2 billion.

The government has said nine foreigners, including five from Taiwan, died in the quake. One of the buildings that collapsed in the quake housed a business listed as Asia Jenny Importaciones, SA de CV. A South Korean man was also confirmed dead.

A Panamanian woman died, as did one man from Spain and one from Argentina.

Information for this article was contributed by Moises Castillo of The Associated Press.

A Section on 09/27/2017