Economy

Mexican economy stumbles in October after a weak third quarter

Despite the shortage of supplies, the contraction in October was led by weakness in tertiary activities showed INEGI

Workers are seen in a building undergoing construction at Mexico City
Workers are seen in a building undergoing construction at Mexico City, Mexico January 30, 2020. Photo: REUTERS/Andres Martinez Casares/ File Photo
  • Compared to the same month last year, the economy grew in October by 0.3% in seasonally-adjusted terms. In unadjusted terms it shrank by 0.7%, the INEGI data showed;
  • Besides that, Mexican business operations have been disrupted by bottlenecks in international supply chains.

The Mexican economy unexpectedly shrank by 0.2% in October from the previous month, as the country’s faltering recovery from the impact of the COVID-19 pandemic dragged into the fourth quarter, official data showed on Friday.

October’s seasonally-adjusted contraction was the third month-on-month decline in economic activity in a row, figures from national statistics agency INEGI showed.

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Compared to the same month last year, the economy grew in October by 0.3% in seasonally-adjusted terms. In unadjusted terms it shrank by 0.7%, the INEGI data showed.

Mexican business operations have been disrupted by bottlenecks in international supply chains, which have led to temporary work stoppages in industries including carmaking, a pillar of the country’s export-driven manufacturing sector.

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But a breakdown of the INEGI figures showed the contraction in October was led by weakness in tertiary activities, which cover services, and by primary activities, which encompass farming, fishing, and mining.

Primary activities shrank by 1.2% from September, while tertiary activities were down by 0.5%. By contrast, secondary activities, which include manufacturing, rose by 0.6%.

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