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Weekly Roundups

Mexico’s GDP Plunged 18.7 Percent in 2Q20

By Andrea Villar | Thu, 08/27/2020 - 15:38

This week, Mexico’s GDP data published on Wednesday showed a contraction of 18.7 percent in 2Q20, the deepest fall in the record. The contraction shows the effects of the global economic crisis brought by the COVID-19 pandemic. It was after this announced that the central bank (Banxico) warned Mexico’s economy could contract by almost 13 percent this year.

”It is too soon to say when we will return to pre-crisis levels,” central bank Governor Alejandro Díaz de León said in a press conference. Banxico said there was a high degree of uncertainty in providing economic forecasts and offered two possible economic scenarios for the country. In the best case, the economy would shrink 8.8 percent this year and rebound by 5.6 percent next year. In a gloomier scenario, growth would be a meager 1.3 percent next year.

Likewise, Mexico's exports showed an annual contraction of 8.9 percent in July. This, however, was a cushioned fall against the three previous months, when exports registered double-digit contractions, according to data published on Thursday by INEGI. Adding July’s numbers, exports spun six months of annualized falls, their worst streak in five years. The data is in line with the reopening of activities at a global level, after lockdown measures due to the COVID-19 pandemic eased. The moderation in the rate of fall also occurs in the context of USMCA’s enforcement on July 1.

More news below:

  • Rating agency Moody’s cut its economic growth estimate for Mexico in 2020 again and now expects a 10 percent contraction due to the long-lasting effect of the COVID-19 pandemic.

  • Mexico's mining industry expects exploration investments to decline in 2020 to their worst level in 14 years. The drop could be even greater given that it does not consider the impact of the pandemic, according to figures released by the Mexican Mining Chamber (CAMIMEX).

  • The US GDP, from April to June, tanked 31.7 percent on an annualized basis, according to the Commerce Department’s second reading, which reflected the biggest quarterly plunge in activity on record

Photo by:   Gam-Ol, Pixabay
Andrea Villar Andrea Villar Journalist and Industry Analyst