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Mexico - December 2020

Economic Highlights

Third quarter growth: On 26 November Mexico’s national statistics institute (Inegi) published figures for third quarter growth which confirmed preliminary figures indicating that GDP grew 12.1% in the quarter compared with the previous quarter. This follows the deep 17.1% quarterly contraction recorded in second quarter of the year, when economic activity ground to a halt amid attempts to contain the coronavirus (Covid-19) pandemic. The latest figures show that the secondary sector (industrial activity) performed particularly well in the third quarter, with 21.7% quarter-on-quarter growth, while the primary sector (agriculture) expanded by 8%; and activities in the tertiary sector (services) grew by 8.8%. This recovery in the third quarter was stronger than expected. However, Inegi’s figures show that third quarter GDP contracted by 8.6% year-on-year, with the tertiary sector down 8.9% and the secondary sector down 8.8%, while the primary sector grew 7.4%. Mexico is still forecast to post a record GPD contraction this year. Mexico’s central bank (Banxico) calculates that GDP will fall by between 8.7% and 9.3% this year, the worst yearly result in 90 years. The International Monetary Fund projects that it will fall by 9%, below its projected average of 8.1% for Latin America and the Caribbean. Meanwhile the Organisation for Economic Co-operation and Development (OECD) estimates the fall will be of 9.2%, the fifth deepest contraction among G-20 economies.  

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