The mexican economy registered the second post-pandemic fall in the fourth quarter of 2021, completing a decrease of 0.1% in real terms and with seasonally adjusted figures compared to the previous quarter, reported the National Institute of Statistic and Geography (Inegi) in its opportune estimation.
In the previous quarter, from July to September, the economy also posted a first drop of 0.4 percent. bank economists Invex, Swiss credit and consulting Moody´s Analytics, explain in their official Twitter accounts that by completing two consecutive quarters in contraction, the definition of a technical recession is met.
The timely estimate of inegi shows a less pronounced fall than the market consensus forecast, which was at 0.3% according to the median of forecasts from 11 analysts polled by Reuters.
For the whole year 2021, Mexico’s GDP achieved a growth of 5%, a positive rate that, however, was not enough to compensate for the 8.2% drop observed in 2020, during the year of the pandemic, which in itself followed the 0.2% contraction observed in GDP in 2019.
If this preliminary information is confirmed by Inegi itself, in the final data of the Gross Domestic Product (GDP), which will be known on February 25, the quarterly photo of GDP during the past year would be as follows:
A negative performance of 0.1% between October and December compared to the previous quarter that confirms a downward trend that began in the third quarter, when the economy registered a contraction of 0.4 percent.
The recessive performance of the second semester of the year interrupted the productive recovery of the first and second when the economy achieved advances of 0.8% and 1.5% respectively.
As explained by economists from the Vanguard investment fund and the Institute for Industrial Development and Economic Growth, the recovery was losing strength, evidencing the absence of an internal stimulus in the economy, and the impact that the solid fiscal incentive did have instead that the United States granted to its inhabitants and that was also poured into Mexico in the form of remittances and demand for exports.
From the perspective of the chief economist for Latin America of Oxford Economics, Marcos Casarin, “the fragility” of the Mexican recovery was the result of the modest fiscal support granted by the authorities in the months of the unprecedented confinement that was presented to delay the spread of the pandemic.
Contracting services since August
In the detail of the information, the Inegi reported a second consecutive quarterly contraction in the sectors grouped in tertiary activities. Thus, the services and commerce that are part of this segment registered a drop of 0.7% between October and December compared to the previous quarter, when these same activities showed a first contraction of 0.3 percent.
The members of the Board of Governors of the Bank of Mexico warned in the last monetary meeting last year that the contraction of services partially reflected the impact of the new regulation for labor subcontracting.
