Afore Withdrawals Soar 101 Percent Due to Unemployment

The effects of the COVID-19 pandemic have not yet manifested clearly. However, one of the most evident consequences to date is the loss of employment. People fired from their job withdrew MX$1.85 billion (US$83.21 million) from Afores inJune, official figures from the National Commission of the Retirement Savings System (CONSAR) show.

The sum is 101.6 percent higher than what was withdrawn in June 2019 and 18.66 percent higher than the withdrawals of the previous month. In the first half of 2020, worker withdrawals totaled US$8.57 billion (US$384 million). Last June, due to the crisis unleashed by the novel coronavirus, 83,311 formal jobs were cut.

By law, people who lose their job must wait 46 days to be able to make a withdrawal from their Afore and once they make it, weeks of contributions are discounted. At the end of June, Afores managed savings of about MX$4.3 billion (US$179 million), according to data from CONSAR.

Despite this, President Andrés Manuel López Obrador is confident that job losses have already bottomed out, while analysts anticipate that a double-digit GDP contraction is inevitable. The president insists that by the end of 2020, his government will create 2 million jobs.

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