The world was hit by a major pandemic at the beginning of the year 2020, and everything started falling apart, including the world economy. However, Mexico’s economy was seeing a decline much before that, precisely since late 2019, and the first two quarters of the year 2020 were particularly bad too, like for every other country. However, the good news is that Mexico’s economy found its growth potential back recently, but its Gross Domestic Product was still found to be less in comparison to the previous year.
The National Statistics Institute Inegi presented a revised data that shed light on the economic growth of Mexico, which was found to have grown by 12.1% during the third quarter of 2020 which included the months of July, August, and September. This data suggests a 0.1% quarter-over-quarter growth in comparison to the data presented in the primary report that was published at the end of October.
Sector-wise growth
In the primary sector including agriculture, fishing, and forests, the economy grew by almost 8% in comparison to the previous quarter. However, on a year-over-year basis, the economy saw a decline of 8.8%.
In the secondary sector which includes mining, manufacturing, production, and construction, the economy grew by almost 22% from July to September 2020. However, if compared with the same period in 2019, there is an economic decline of around 8.8%.
In the tertiary sector, commerce, finance, trade, transport, and media services are included. Mexico’s economy grew by 8.8% in this sector, but on an annual basis, the economy seems to have declined by almost 8.9% in comparison to 2019.
All in all, in comparison to the same period last year, the GDP now has shown a decline by 8.6%, and the year-over-year decline continues to be around 18.7%, which was estimated in the second quarter of 2020. At that time, during April and May, the Mexican government had ordered the suspension of all non-essential activities that could boost the economy.
This current report suggests a quarter-over-quarter growth of the economy in all the major sectors. It shows that Mexico’s economy is on the path of recovery, however, there is still a lot of uncertainty of what will happen by the end of the fourth quarter, and whether this growth will continue in 2021 also or not?
The coronavirus pandemic is still here, afflicting millions of people all over the globe, claiming lives, and impacting all the world’s businesses.
Better hopes for the future?
Before we look at the future of the Mexican economy, we must look at the present and recent past. As stated before, Mexico’s economy has been treading towards a decline since late 2019. As per Gabriella Siller, an economic analysis director, the last time Mexico saw consistent negative growth through six back-to-back quarters was in 1982.
Seeing the current trend, there are high chances that Mexico’s economic contraction may worsen in the future. Although the present quarter-over-quarter GDP rise may give a little hope, the Bank of Mexico still thinks that because of a high degree of uncertainty about what the future will unfold on both domestic and global grounds, nothing can really be predicted. Mexico’s economy may see growth from 0.6% to 5.3% next year with a GDP expansion between 1.3% to 5.6%. But once again, these are just forecasts, and nothing carved in stone. Only time can tell how correct these predictions by the Bank of Mexico prove to be.
The same bank has predicted that around 150,000 to 500,000 jobs in a formal sector may be created. It probably means that new job openings will pave a path to an upward-moving economic growth curve.
While its predictions are concerned, surprisingly they turned quite true as the Bank of Mexico had predicted an economic growth decline between 8.7% to 9.3% this year. And it is very close. It also predicted a total loss of 700,000- 850,000 jobs in the formal sector.
Although, there are no solid grounds to be optimistic about, yet Mexico can feel a little happy about the GDP rebound in the third quarter of this year.
I’m Ava Paul, an experienced news website author with a special focus on the entertainment section. Over the past five years, I have worked in various positions of media and communication at World Stock Market. My experience has given me extensive knowledge in writing, editing, researching and reporting on stories related to the entertainment industry.
