Sharp slowdown in Mexico’s economic growth in Q3: poll

27 Oct 2021

Economic growth in Mexico likely suffered a slowdown in Q3 due to a surge in Covid cases and supply chain issues, according to the findings from a Reuters survey.

Mexico’s GDP is forecast to have grown by 0.1% in the third quarter from the previous quarter, compared to 1.5% growth in seasonally adjusted terms in Q2, as per the results of an average forecast from 13 analysts.

In addition, year-on-year, GDP is forecast to have risen 6.0% in quarter three, compared to 19.6% growth during the same time in 2020.

"The economic recovery weakened in the third quarter due to a double effect: acceleration of the pandemic and worsening of the shortage of semi-conductors, which had a significant cost in domestic production," said Alfredo Coutino, director of analysis for Latin America at Moody's Analytics.

In addition, according to local bank Citibanamex, the drop in growth is down to an economic slowdown in the U.S., Mexico’s principal trading partner.

Economic activity in Mexico contracted in August by 1.6%, the largest decline in 15 months. Following the release of the data, many analysts downwardly revised their Q3 forecasts.

The Mexican economy contracted 8.5% in 2020, the worst performance since 1932, Reuters reports.

Moreover, according to private sector analysts, the economy will grow by 6.2% in 2021, as per the results of a Bank of Mexico survey published earlier this month.

Mexico’s national statistics agency INEGI is due to release GDP data for the third quarter on Friday morning.

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