Mexico’s economy down 0.2% in third quarter

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With this, the national GDP was interrupted by a streak that lasted one year.

The Mexican economy contracted 0.2 percent in real terms in the July-September period compared to the previous quarter, according to the timely estimate of the National Institute of Statistics and Geography (Inegi) published this Friday.

With this, the one-year streak of Mexico’s Gross Domestic Product (GDP) was interrupted, which had four consecutive quarters with gains.

By sectors, the primary (which includes agriculture and livestock activities) rose 0.7 percent; the secondary (related to industry) advanced 0.7 percent, and the tertiary (which has to do with services, such as tourism) contracted 0.6 percent.

In the annual comparison, that is, between the third quarter of this year compared to the same period of the previous year, GDP rose 4.5 percent.

And in the first nine months of 2021, the timely GDP had a growth of 6.4 percent compared to the same period of the previous year, according to Inegi.

This timely figure may change with respect to the traditional quarterly GDP, which will be published on November 25, 2021.

The new brake on Mexico’s economy, which in 2020 had its worst fall in decades, was coming: the Global Index of Economic Activity (IGAE), a kind of monthly GDP, advanced only 0.1 percent in July, while in August it had a not encouraging data: a fall of 1.6 percent.

With the pandemic already out of its third wave and with more than 118 million Mexicans with at least one dose of COVID vaccines, the danger now for the national GDP (and for the world economy) comes from another front: the shortage of semiconductors and bottlenecks.

For example, exports – one of the engines of the economy – slowed again, particularly due to the automotive sector, which is one of the most affected by the lack of chips. In recent weeks, plants of General Motors, Volkswagen and Honda have been forced to technical stoppages due to the shortage of semiconductors.

But the next two months could mean the difference between meeting the Treasury’s forecast of a 6.3 percent rebound or not. With more and more Mexicans vaccinated against COVID, federal and state governments have accelerated the removal of various restrictions due to the pandemic, opening up more economic activities.

The ‘clean and jerk’ that consolidates the growth of the economy in the last quarter of 2021 may come from domestic consumption, which has two events in sight that are conducive to spending: the Good End -which begins in less than two weeks-, and sales end of the year.

Source: elfinanciero.com.mx

Mexico Daily Post