Mexican Economy Extends Contraction In March But Rebound Likely

• Mexico’s economy extended its losing streak in March, shrinking by more than 2%. Analysts expect a rebound in subsequent months as the pandemic subsides and the country benefits from the spillover effects of economic stimulus in top trade partner, the United States.
• The Mexican economy contracted by 2.1% in March compared to the same month last year, preliminary data from national statistics agency INEGI showed on Monday, deepening Mexico’s economic woes.
• Latin America’s second-largest economy was already in a slight recession in 2019 and then contracted by 8.5% in 2020, its deepest dive in almost 90 years, because of the coronavirus pandemic. However, the economy recovered quicker than first estimated in the final quarter of 2020.
• Secondary activities, which include manufacturing, were down 0.9% for the month while tertiary activities such as services slid 3.1%, according to the INEGI estimate.
• A return to modest economic growth is forecast later this year for Mexico’s economy as the United States begins to implement a nearly $2 trillion economic stimulus package enacted by President Joe Biden and his congressional allies.

(Source: Reuters)