Mexico’s Gross Domestic Product (GDP) Fell at a Quarterly Rate of 0.23 Percent
According to calculations by the Treasury, in the third quarter the GDP has recovered 97.2% of its level prior to the pandemic. The Mexican economy interrupted its recovery in the third quarter and reported a decline, which led to cuts in growth forecasts for this year by various institutions.
According to INEGI data, Mexico’s Gross Domestic Product (GDP) fell at a quarterly rate of 0.23 percent, its first fall after four consecutive quarters of increases.
“The decline of 0.2 percent that anticipates the timely estimate of the Gross Domestic Product for the third quarter, would place it at a level similar to that of 5 years before at constant prices,” said Julio A. Santaella, president, on his Twitter account. of INEGI.
Citibanamex considered that the drop in economic activity is mainly due to the effects of the new outsourcing law in business support services. “The rest of the activity maintained a gradual upward trend, although more moderate than in the first half of the year,” they indicated.
After the GDP results, the financial institution cut its growth forecast for this year, from 5.9 to 5.0 percent, and for 2022 it adjusted it to 1.9 percent, from a previous 2.7 percent.
“What we are seeing in terms of data is that all the impetus that the economic recovery had, especially in the second quarter of the year, seems to be being lost, so we see a fairly moderate and weak recovery that has to do not only with other issues such as labor outsourcing, also with the delay in supply chains, “said Adrián de la Garza, director of economic studies at the bank.
For its part, JP Morgan was another institution that lowered its growth forecast for this year to 6.2 percent from 6.5 percent. The estimate for 2022 was unchanged at 3.1 percent.
Barclays expects the economy to register an increase of 5.5 percent by 2021, which represents a decrease from its previous forecast of 6.0 percent. “The balance of risks is still down for our growth prospects due to the resurgence of the pandemic and the extension of supply shocks amid low levels of investment in the economy,” experts said.
Banorte reduced its projection for this 2021 to 5.7 percent from 6.2 percent previously.
“We think the report suggests a new ‘third wave’ impact. However, it also points out that the magnitude of the effect is increasingly limited, with the population increasingly adapted to the pandemic and we maintain our estimate for 2022 at 3 percent, anticipating that the recovery will continue at a relatively favorable pace from the fourth. quarter of this year ”.
Banco Base also lowered its estimates for GDP at the end of the year, “we had an expectation between 5.8 to 6.7 percent and now we estimate that it could grow between 5.4 to 6.2 percent.”
Other institutions that cut their estimates were CI Banco, from 6.3 percent previously to between 6.0 percent and 6.1 percent for this year. Moody’s forecasts growth of 5.8 percent, from the previous projection of 6.2 percent.
For Monex analysts, the GDP report creates a negative context for the short-term prospects, and they see less probability that the economy will grow above 6.0 percent for the year. “In the next few days we will be reviewing our estimates.”
On Friday, the Undersecretary of Finance, Gabriel Yorio, indicated that the economic recovery continues its course and the growth expectation of 6.3 percent for 2021 is maintained, despite the fall in the third quarter, which is due to a recomposition of the GDP, and It has to do with the registration of outsourcing activities, since personnel who were in this activity are being integrated into other industries, which generates accounting problems.