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Mexico's GDP rebounds 12% in the third quarter

2020-10-30T20:12:06.198Z


The data reflects the gradual economic reactivation of the country, but does not recover from the collapse of the second quarter. The recovery, says one expert, is increasing inequality.


A restaurant in Mexico City during the reopening of commercial activities.CARLOS JASSO / Reuters

The Gross Domestic Product (GDP) of Mexico grew 12% during the third quarter of the year compared to the previous quarter, according to the estimate made by the National Institute of Statistics and Geography (Inegi).

The data reflects the gradual economic reactivation of the country, which suffered the worst impact derived from the pandemic during the second quarter, when its economy plummeted 17.3%.

By components, the GDP of secondary activities grew by 22% in the quarterly rate, while tertiary activities grew by 8.6% and primary activities by 7.4%.

In the third quarter of 2020, the Timely Estimate of Gross Domestic Product #PIB increased 12% compared to the previous quarter, and had a real reduction of (-) 9.8% in its annual reference (seasonally adjusted figures) #INEGI #ComunicadoINEGI https: / /t.co/NMVoMX1uD2 pic.twitter.com/6TGUSOr1PY

- INEGI INFORMA (@INEGI_INFORMA) October 30, 2020

President Andrés Manuel López Obrador said this Friday at his press conference at the National Palace that the GDP figure is an indicator that "our forecast is being fulfilled" and "is recovering soon from the economic crisis."

"It is helping us a lot that the decision has been made to open on time, with health protocols, three branches of the economy: the construction industry, which opened in June, the automotive industry and the mining industry," said the leader.

When compared to the third quarter of 2019, the country's GDP has fallen by 8.6%, with falls in secondary activities (-8.9%) and tertiary (-8.8%).

In contrast, primary activities grew 7.4%.

In the first nine months of the year, the accumulated GDP fell by 9.8% compared to the same period of the previous year.

"Although this reflects an important behavior of the economy, it is not necessary to raise bells to the flight because the behavior of this 12% in relation to the -17% that we had the previous quarter, does not reflect in a balanced way the growth of the national economy" , says José Ignacio Martínez Cortés from UNAM's Laboratory of Commerce, Economics and Business (LACEN) As the president said, secondary activities such as manufacturing and the automotive industry showed a recovery at a faster pace than the services sector , which includes tourism, one of the sectors hardest hit by the pandemic.

In northern states of the country, where wages are already higher and there is more employment, the recovery is faster than in southern states that depend on tourism, explains Martínez Cortés.

“Paradoxically, the president contradicts himself in the sense that he has said that the GDP does not reflect the development conditions of the country and today he is happy because the GDP grew.

But, I emphasize, inequality increased ”, said the economist.

To estimate the economic well-being of Mexico it is essential to follow the behavior of the US economy, says the expert.

The GDP of the United States, Mexico's main trading partner, grew 7.4% quarterly in the third quarter of 2020, which is equivalent to an annualized rate of 33.1%, according to data reported yesterday by the Department of Commerce. .

“One of the indicators that reflect this GDP growth in Mexico is precisely the automotive industrial activity in the United States that is growing.

And that, in turn, is reflected in the creation of manufacturing jobs, ”says Martínez Cortés.

“It is the exporting, manufacturing and automotive entities that are growing the most.

And where there is less growth, of course, are the entities where there is no global manufacturing or industrial activity ”, he adds.

Source: elparis

All news articles on 2020-10-30

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