Following an announcement Thursday that the country had undergone its first economic contraction in a decade, President López Obrador said the figure had been anticipated and that he had “other information” which revealed that there had been development and improved conditions.
“This doesn’t matter much to me because, as I’ve said, growth can simply mean there’s more wealth in the hands of the few. During the neoliberal period there was hardly any growth, and what growth there was reached the hands of only a precious few,” he said at his morning press conference.
The National Institute of Statistics and Geography (Inegi) announced Thursday that GDP had contracted by 0.1% in 2019, the first decline since 2009, the year of the world financial crisis when GDP fell 5.3%.
The 2019 figure failed to meet the expectations of the federal government, which had expected growth between 0.6 and 1.2%. It also fell short of the forecast by the World Bank and International Monetary Fund (IMF), which foresaw no change.
López Obrador said that growth in Gross Domestic Product (GDP) wasn’t the only thing that mattered, citing the better distribution of wealth and a guarantee that the benefits reach everyone. He said the latter was indeed the case, as purchasing power had increased and a consumer crisis averted.
“What matters most is the economy of the family … There will indeed be growth,” the president said.
Inegi’s figure was in line with the expectations of most analysts. The -0.1% figure coincided with predictions by the Banco de México (Banxico), which in November adjusted its forecast downward to between -0.2 and 0.2%.
In the fourth quarter, the country’s economy contracted 0.3%, the biggest drop in 2019. During the same period, the primary sectors (agriculture, livestock, etc.) registered a 1.9% annual advance, while industries fell 1.5% and services, the key driver of growth in the Mexican economy, grew 0.1%.
“The most important factor to explain the negative results of 2019 was the fall in productive investment, which until the month of October had an average drop of 5.2%,” according to El Financiero.
“Another of the factors that had a negative impact on economic performance was government spending. According to the Finance Secretariat, the public sector had a real decrease of 1.8% until the month of November.”