Buoyed by services and exports to the us , the Mexican economy grew 1.5% within the second quarter of 2021 compared to the primary quarter and 19.7% compared to the April-June period of 2020, preliminary data from the national statistics agency Inegi showed on Friday.
It was the fourth consecutive quarter of growth but the 1.5% seasonally adjusted expansion was 0.2% below the typical forecast of 14 analysts surveyed by the press agency Reuters.
The near 20% annual expansion, the primary year-on-year quarterly growth since the beginning of the pandemic, is that the largest on record.
Much of the Mexican economy was pack up for many of the second quarter of last year because the results of a government-mandated suspension of nonessential activities thanks to the burgeoning coronavirus outbreak. GDP slumped 8.5% in 2020, the worst economic contraction since the good Depression, as Covid-19 ravaged the economy.
Inegi data showed that secondary sector activities, including manufacturing, were up 28.2% within the April-June quarter compared to an equivalent period of last year. Demand for Mexican-made cars and electronics within the us drove the strong result.
Data also showed that tertiary activities, including trade and financial services, were up 17% annually within the second quarter, while primary activities, including agriculture and fishing, were up a smaller 6.8%. Domestic consumption was buoyed by record remittances sent home by Mexicans working abroad.
Quarter-on-quarter growth was 2.1% within the tertiary sector, 0.6% within the primary sector and 0.4% within the secondary sector, Inegi said.
Despite the second-quarter growth, GDP was still 3.6% below the extent it achieved within the July-September quarter of 2019, said Gabriel Casillas, an economist at the bank Banorte. The economy was already contracting when the coronavirus hit Mexico in early 2020.
After last year’s steep recession there’s many scope for growth, although the third wave of the pandemic will likely dampen the recovery within the third and fourth quarters.
“We expect real GDP growth to succeed in 6% in 2021, but the recent deterioration of the Covid backdrop, high inflation and rising rates could hamper the envisaged recovery,” Goldman Sachs economist Alberto Ramos said during a note to clients.
He also said that growth within the second quarter was hampered by supply chain disruptions and a shortage of parts, including computer chips, for key industries.
Growth within the half-moon of 2021 was 0.8% compared to the previous three-month period but GDP declined 2.8% compared to the January-March period of 2020. Mexico announced its first confirmed Covid-19 case on February 28, 2020. The accumulated tally now stands at quite 2.8 million while the official Covid-19 price reached almost 240,000 on Thursday.