Mexican 2nd quarter GDP grows 1.5% over Q1 2021, 19.7% over Q2 2020

RIO DE JANEIRO, BRAZIL – Mexico’s gross domestic product (GDP) grew by 1.5% in the second quarter of the year compared to the first quarter, according to seasonally adjusted figures, the National Institute of Statistics and Geography (Inegi) reported on Friday, July 30.

In comparison with 2020, Mexico’s GDP rose 19.7% in the second quarter and 7% in the first half of the year, based on preliminary original figures.

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The figure is the first year-on-year growth in a quarter after eight consecutive declines, including the historic contraction in the second quarter of 2020, when Mexican GDP plummeted 18.7% due to the covid-19 health emergency that suspended non-essential sectors.

According to seasonally adjusted figures, compared to the first three months of 2021, the April-June period showed quarterly growth of 2.1 % in tertiary activities, 0.6 % in primary activities, and 0.4 % in secondary activities.

Secondary activities grew by 28.2% on a year-on-year basis, tertiary activities by 17.1%, and primary activities by 6.7 %, based on unadjusted original figures.

The first semester of 2021 was due to the annual increase of 10.6% in industry, 5.8% in services, and 4.8 % in the agricultural sector, detailed the autonomous organization.

In addition to 2.8 million contagions and almost 240,000 deaths, the fourth-highest figure globally, the Covid-19 crisis caused a historical contraction of 8.2% of the GDP in 2020.

But the government’s Ministry of Finance and Public Credit (SHCP) has forecast a rebound of over 6% for 2021, anchored in foreign trade, particularly in the Mexico-United States-Canada Agreement (USMCA).

Organizations such as the International Monetary Fund (IMF), BBVA, and the Bank of Mexico (Banxico) have raised their GDP growth forecasts above 6%, pointing to the recovery of the United States as one of the main factors.

Mexico’s GDP was already dragging a 0.3% contraction in 2019 despite a 2.1% growth in 2018.

The data released this Friday is a timely estimate by Inegi, and the final figure will be released in the coming months.