From St Catharines Standard

Posted By REUTERS

Mexicans are lining up at pawnshops to hock their jewelry, family heirlooms — and in one case a harp fashioned from a shark’s jaw — in more evidence Mexico is struggling to recover from a deep recession.

Maria del Refugio Garduno, a 60-year-old widow, pawned her watch for 400 pesos ($31) after her son lost his job last month, sending her household’s finances into a tailspin.

“I had to come here just to be able to buy some medicine,” Garduno said at a pawn shop in the capital, Mexico City. “Our money just isn’t going far enough.”

Across the country, unemployment remains near its highest level in 14 years even though Mexico’s recession technically ended in the third quarter with a big industrial rebound.

The government thinks better jobs data from December shows Mexico has turned a corner in terms of employment, but even the finance ministry expects only a partial recovery from last year when the economy likely shrank about 7%.

Loans made at Nacional Monte de Piedad, Mexico’s largest chain of pawnshops, rose about 20% during the first three weeks of January compared to the same period in 2009.

The increase is higher than the 10% rise in pawns during 2009, and some people borrowing against their wares said recent tax hikes and rising government-set fuel prices had put extra pressure on their finances.

A value-added tax on most goods rose by 1 percentage point to 16% on Jan. 1, a few weeks after the government bumped up gasolizne prices after keeping them steady most of 2009.

“It’s hitting me all at once,” said Pedro Uribe, a street vendor in downtown Mexico City, who pawned one of his wife’s religious figurines.

Tags: consumer credit, economic crisis, Mexico City, Pawn Loans, pawnbroker, pawnshop