Mexico's economy slips in December, raising specter of recession

MEXICO CITY, Jan 18 (Reuters) - Mexico's economy likely shrank 0.2% in December compared with the same month a year earlier, a preliminary official estimate showed on Tuesday, stirring concerns the country may have slipped into a recession in the second half of 2021.

The figures from national statistics agency INEGI showed that secondary activities, which include manufacturing, rose by 0.4% on the year in December, whereas tertiary activities, which comprise the service economy, contracted by 1.3%.

Mexican gross domestic product (GDP) contracted in the third quarter Link of 2021, and the latest figures gave rise to estimates that the economy may have done the same in the October-December period, although the data are still incomplete.

The economy shrank in October from September and a preliminary estimate for November showed the economy barely grew in comparison to the same month in 2020. Complete data for November are due to be published by INEGI on Jan. 25.

Jonathan Heath, a board member of Mexico's central bank, said on Twitter that if the data already published are not revised, the Mexican economy may have contracted by 0.5% quarter-on-quarter during the final three months of last year.

Two consecutive quarters of contraction would mean that Mexico had entered a technical recession as 2021 closed out.

Mexico's recovery from the economic impact of the coronavirus pandemic has been significantly undermined by bottlenecks in global supply chains.

INEGI is due to publish a preliminary estimate for gross domestic product (GDP) in the fourth quarter on Jan. 31.
Reporting by Ricardo Figueroa and Marion Giraldo; Writing by Dave Graham Editing by Andrew Heavens and Grant McCool

Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.

All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.

Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.

We are using cookies to give you the best experience on our website. Read more or change your cookie settings.

Risk Warning: Your capital is at risk. Leveraged products may not be suitable for everyone. Please consider our Risk Disclosure.