IGAE gets its worst result in the last 10 months

August 26, 2022 | 05:00.

The Mexican economy ended the second quarter of the year with two consecutive monthly declines, although the entire period showed a positive growth rate.

If this downward trend continues, The country’s economic activity will constitute a deteriorating environment for the second half of 2022.

According to seasonally adjusted data, The Global Index of Economic Activity (IGAE) decreased by 0.31% last JuneIts second straight decline (in May down 0.20%) and its worst level in 10 months.

The The strength of the second quarter of the national economy came from Aprilwhen an IGAE increase of 1.08% was obtained, which at that time was the best result in 13 months.

The above is summed up in a number GDP, whose quarterly variance in April-June was 0.92% Represents three consecutive quarters with increments.

however, It was lower than the average for the first three months of 2022which was 1.14% already showing signs of weakness at the end of the second quarter.

It may interest you: GDP scores best in three quarters, but grows below estimates

recovery process

Monks remembered that The Mexican economy is still recovering After a rather steep fall.

At the moment, the size of our economy is similar to that of 2017 and the delay in restoring pre-crisis levels is up to 2.35%, which reflects that low growth remains one of the main challenges for our country.

The financial group warned.

He added that regardless of whether the outlook for the first half of the year is encouraging (1.9% annually), forThe data confirms the change in trend the economy has seen in recent months.

Engines stopped

The 0.31% monthly decline in the IGAE index during June of this year is due, from a sectoral angle, to the contraction of its main drivers: manufacturing and retail.

Secondary activities rose only 0.6%, the lowest level in four months, with construction growing 0.32% and mining 2.13%. The sector referring to energy, water and gas declined 1.00%.

Alarm focus is on manufacturingwhose 0.05% drop sent the markets reeling. While production bottlenecks are minor, they still exist.

But the main problem of national industrialization is The recession phase of the American economythe largest supplier of Mexican exports.

Never stop reading: US GDP shrinks 0.6% in the second quarter of 2022

Inflation takes a bill

Meanwhile, higher education activities increased by 0.04% per month in June, an increase that responded to the rebound effect, where a 0.71% decrease was observed in May.

‘Achilles heel’ of these activities is retailthe Mexican household consumption index, due to a contraction of 1.29%, the second in a row.

This result reflects The effect of high levels of inflation on the purchasing power of households in the countrywhich was further reduced by the increase in the rate of monetary policy which discourages spending.

Read also: Onions and tortillas drive PACIC inflation to its 16-year max

fluctuating field

finally, Initial activities showed the largest decline among all IGAE’s economic branches5.97%.

The Mexican countryside is suffering High international prices for some agricultural raw materials at that time Because of the Russian invasion of Ukraine, despite the correction recorded in the month of analysis.

however, The behavior of primary activities, due to its relationship to fixed cycles, is usually highly volatile.