Wednesday, December 6, 2023

Surprise economic contraction: 0.2% decline in first-quarter growth

The first quarter got off to the worst start economically in the last 10 years.

The economy contracted 0.2% compared with the previous quarter, when gross domestic product grew 0.2%.

The preliminary figures were released today by the national statistics agency, which said annual growth in the period was up 1.3% compared to a year earlier.

The results will come as a surprise to analysts at at least four financial institutions who predicted yesterday that GDP growth would be as little as 1.1% and as high as 1.6%.

The first-quarter decline was caused largely by a deceleration in services and manufacturing.

The January fuel shortage and strikes in Tamaulipas might have been a factor as well.

The quarter compares poorly with the first three months in the terms of the last three presidents. In the government of Enrique Peña Nieto the economy saw annual growth of 2.7%, for Felipe Calderón it was 2.2% and for Vicente Fox, 1.8%.

The Finance Secretariat is forecasting annual growth between 1.1% and 2.1% this year, although President López Obrador is more optimistic and predicts 2%.

Source: Milenio (sp), Bloomberg (en), El Financiero (sp), El Economista (sp)

Have something to say? Paid Subscribers get all access to make & read comments.

Asylum applications in Mexico hit historic numbers this year

The applications through November surpass the previous yearly record, with most asylum-seekers coming from Cuba, Haiti and Honduras.

New ‘home office law’ takes effect in Mexico

Regulation approved in June for remote workers in Mexico, including reimbursements and the right to disconnect, went into effect on Tuesday.
Tesla vehicles on a trailer

Got 1 min? Elon Musk says ‘next-gen’ Tesla vehicles to be made in Mexico

In an interview, Musk said the manufacturing innovations of Tesla's low-cost electric vehicles will "blow people's minds."