Mexico Economy Disappoints As Resurgent COVID Halts Recovery

• Mexico’s economy shrank more than expected in the third quarter after new legislation banning labour outsourcing hit the services industry and coronavirus cases surged. Gross domestic product fell 0.4% quarter over quarter, more than its preliminary 0.2% drop and the median estimate of a 0.3% fall in a Bloomberg survey. 
• It’s the first contraction since the second quarter of 2020, when Mexico imposed its harshest set of restrictions to tackle the COVID-19 pandemic. Year over year, GDP grew by 4.5%, according to final data from the national statistics institute published Thursday. 
• The quarterly contraction halts the recovery of Latin America’s second-largest economy, which is far from returning to pre-pandemic levels after suffering last year its worst recession in almost a century. 
• It also contradicts President Andres Manuel Lopez Obrador, who has repeatedly said the economy is doing well despite his decision to avoid additional public spending to support households and companies during the pandemic.

(Source: Bloomberg)