Mexico's GDP grows in the second quarter but the government lowered its forecast for 2022

By activities, growth was 3.3% in the mining, manufacturing, construction and electricity sectors. 1.4% in agriculture and livestock; and 1% in trade and services afp_tickers

This content was published on Jul 29, 2022 – 11:23

(AFP)

Mexico’s economy grew 1.9% in the second quarter of 2022 compared to the same quarter of 2021, and 1% compared to the previous quarter, the official statistics agency reported Monday.

According to the National Institute of Statistics (INEGI), by activities, compared to the same period last year, the increase was 3.3% in the mining, manufacturing, construction and electricity sectors, 1.4% in agriculture and livestock and 1% in trade. and services.

In the first quarter of the year, Mexico’s GDP grew by 1.8% during the same period in 2021, while it grew in all of 2021 after collapsing by 8.4% in 2020 due to the coronavirus pandemic.

Meanwhile, the government has lowered its GDP growth forecast for all of 2022, from 3.4% to 2.4%.

This is the second time that forecasts for the performance of the Mexican economy have been cut this year, after the Treasury revised it in April from 4.1% to 3.4%.

Putting the global economy, inflation in Mexico, at its highest level in two decades, more restrictive monetary policy and the persistence of the COVID-19 pandemic, prompted the government to make this new adjustment.

In June, the Bank of Mexico (Banxico, central) also cut its forecast for economic growth this year to 2.2% from the previously expected 2.4%.

The institution believes that although the Mexican economy faces a more favorable environment in terms of the spread of the epidemic, which would boost domestic demand, elements such as the behavior of oil production have been “adjusted downward.”

Banxico’s forecast for 2022 is higher than the 1.8% estimated by private analysts, but less optimistic than the 2.4% forecast by the government.