MEXICO CITY, (Reuters) – Mexico is facing the threat of “prolonged und more accentuated weakness” in its economy due to a pandemic that has weighed heavily on the country’s recovery.

A report by the financial stability council of Latin America was released late Thursday, detailing the warning to Latin America’s second largest economy.

This council includes Mexico’s finance Minister, governor of the central bank and the head of Mexico’s banking commission. It also mentioned “potential consequences” depending on how credit agencies evaluate state-owned Pemex. Pemex is the most indebted oil company in the world, having lost its investment-grade rating in 2020.

Still, the credit rating for Mexico’s ailing oil giant may continue to sink.

In the third quarter, the Mexican economy contracted by 0.4%. This was more than anticipated and it is the first quarterly contraction since the outbreak of the coronavirus last year.

However, the quarterly annualized gross domestic product growth was 4.5%.