Monday, May 27, 2024

Mexican Economy Bounces 12.1% In Third Quarter

The economy of Mexico grew 12.1 percent in the third quarter of 2020 compared to the previous quarter, according to revised figures of the National Institute of Statistics and Geography (INEGI) published Thursday.

The data is slightly better than the timely estimate reported by the agency in October, when it pointed out that the advance of the Gross Domestic Product in that period had been 12 percent.

The ‘rebound’ seen in the economy between July and September is the best quarterly advance in the Inegi records and comes after the worst contraction in the country’s history.

As a point of comparison, the closest figure to this figure is the growth of 3.2 percent in the third quarter of 2009, when the Mexican economy was recovering from the global crisis of a year earlier.

The figure also represents, in the quarterly comparison, a halt to a five-quarter streak with contractions, including that of the April-June period, when the economy fell 17.1 percent due to the effects of containment measures to combat the spread of COVID -19.

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In its annual comparison , the GDP had a contraction of 8.6 percent, according to data from Inegi.

Pandemic factor
The development of the pandemic is precisely the point to observe in the current quarter for the Mexican economy, since the return of more states in the country to impose restrictive measures on non-essential economic activities could slow down the recovery.

Data such as the Global Index of Economic Activity (IGAE) , which functions as a ‘monthly GDP’, show a slowdown in the country’s economy.

On the other hand, the job creation figure shows a recovery, after more than 1 million formal jobs were lost during the harshest months of confinement. In August, more than 92 thousand jobs were created; in September, about 114 thousand, while in October a historical record of 200 thousand 641 jobs was registered, this according to figures from the Mexican Institute of Social Security (IMSS).

With this, in three months around 406 thousand jobs have been created.

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Domestic consumption can also help sustain the economic recovery, with events like El Buen Fin , the sales program that this year was extended from four to 12 days.

The expectation of the Confederation of National Chambers of Commerce, Services and Tourism (Concanaco-Servytur) was to match the sales of 118 billion pesos in 2019. According to the Federal Consumer Prosecutor’s Office (Profeco), that amount was not only matched , but surpassed although the final data have not yet been confirmed.

However, this inertia may be slowed by the advance of the pandemic in the country. Chihuahua and Durango returned to red, the maximum alert level, at the epidemiological risk semaphore for COVID-19, and six other entities (Aguascalientes, Mexico City, Coahuila, Querétaro, Nuevo León and Zacatecas) are close to passing to this phase, the Ministry of Health reported last Friday.

According to the health authorities, only essential economic activities are allowed at red traffic lights, a provision seen during the National Day of Healthy Distance.

However, one piece of news that could sustain the recovery of the Mexican economy would be the start of vaccination campaigns against the new coronavirus.

That possibility was opened with the publication of results from Pfizer, a company with which the Government of Mexico has a pre-purchase agreement for up to 34.4 million vaccines of its two-dose-per-person regimen.

The pharmaceutical company has already requested the emergency authorization of its injection, which is 95 percent effective, from the United States Food and Drug Administration, whose decision could be known on December 10.

Speaking about Pfizer , Marcelo Ebrard , Secretary of Foreign Relations, explained Tuesday that the start of vaccination in Mexico “is imminent” and pointed out that the doses from the pharmaceutical company could reach the country within a period of five days.

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