Mexican Economy Rebounds in Third Quarter
By Anthony Harrup
MEXICO CITY -- Mexico's economy picked up sharply in the third
quarter, led by a rebound in industrial production as businesses
reopened from shutdowns to slow the spread of the coronavirus.
Gross domestic product, a measure of the country's output in
goods and services, expanded 12% in seasonally adjusted terms from
the second quarter, the National Statistics Institute said Friday.
Industrial production was up 22%, outpacing services, which
The rebound from the 17.1% contraction in the previous quarter
left economic activity in the July-September period 8.6% below its
The recovery in industry was helped by external demand for
Mexican-made goods -- exports were back above year-earlier levels
by September -- and the reopening in June of key industries like
autos and construction.
The domestic economy has been slower to recover, as employment
and consumer confidence remain well below pre-pandemic levels, and
travel and tourism is still sluggish.
As in the U.S., which on Thursday reported a 7.4% expansion in
third-quarter GDP, Mexico's recovery is expected to lose steam in
the fourth quarter.
"Mexico's economy confirms, one more time, its high dependence
on the U.S. economy," said Alfredo Coutiño, director for Latin
America at Moody's Analytics. "The economy quit the recession in
the third quarter as a result of external demand more than the
The third-quarter expansion snapped a string of five consecutive
quarters of economic contraction.
Domestic consumption was helped by the government's cash
transfers to the most vulnerable groups and to an even greater
extent to the increase in remittances from Mexicans working abroad,
Mr. Coutiño added.
Economists polled in September by the Bank of Mexico expect
output to shrink 9.8% for all of 2020, which would be the deepest
recession since the Great Depression of the early 1930s.
Health authorities have warned of a possible second wave of
coronavirus infections as the weather turns colder, but don't
expect to impose shutdowns like those put in place in April and
Mexico has confirmed close to 91,000 deaths of people infected
with the virus since March. The number of weekly deaths picked up
modestly in mid-October after falling steadily from a high point
above 5,000 a week in July.
Mexican schools have been closed since late March, with lessons
currently being given online and by television. Public places like
shops, restaurants and hotels require customers to use face masks,
but President Andrés Manuel López Obrador has rejected the idea of
imposing curfews or fines to enforce health recommendations.
Write to Anthony Harrup at firstname.lastname@example.org
(END) Dow Jones Newswires
October 30, 2020 09:01 ET (13:01 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.