A spokesman for the Mexican Business Cycle Dating Commission, Luis Fonserada, said the Mexican economy entered an expansion phase in June 2020 that “may last two years.”
“It looks like we’ve been expanding for two years, but I don’t know if it’s been 25 months. Later, with the final numbers, we will do an analysis that will allow us to unanimously conclude if there is a turning point.”
During the first press conference of the commission empowered to formally identify turning points in Mexico’s economic cycles, he identified this phase of the economic cycle as the sixth expansion recorded since 1980.
At the same conference, Jonathan Heath, one of the seven members of the Dating Commission, argued that the expansionary phase of the economic cycle after the last recession began in June 2020, “but we don’t know or have more information if it continues.”
“It started simply in the month of June (2020), with a very big recovery in economic activity, if it becomes general, it will meet the criteria of spread and depth, because it starts to expand significantly and from then on we will see if it is sustainable.”
Gerardo Leyva, who is also a member of the body, specified that the way the committee sees the cycles as sequences of stagnation and expansions, and therefore they cannot say how long the current cycle will last. “We don’t have the elements to say what its duration or characteristics will be. So we will have to wait for more data.”
Six recessions in 42 years
Until today, there was no official definition of recession in Mexico, and there were no business cycle calendars. Since 2019, a group of eminent economists and researchers, invited by Inegi, has recommended the creation of an economic cycle dating commission.
By February 3, 2021, the commission, whose analogies are found in the Business Cycle Dating Commission of the National Bureau of Economic Research (NBER), United States, dating back to 1978, was established.
As a result of this entry into the commission’s operations, they identified six recessions in Mexico: 1981 and 1982; Then in October 1985 to December 1986; December 1994 to May 1995; October 2000 to January 2002; July 2008 to May 2009 and from June 2019 to May 2020.
Gabriel Casillas, chief economist for Latin America at Barclays and also a committee member, participated in the same conference, explaining that they used the classic definition of a recession by Barnes and Michelle, who founded NBER in the United States.
A cycle of stagnation occurs in almost all sectors of the economy at the same time and is preceded by large-scale episodes of expansion.
According to information from the commission, the recessive phase in Mexico coincided with that experienced in the United States in 2009 and 2020.
Although the recession period encountered in both countries was different. Mexico received the impact of the epidemic and the historic blockade with the recession already installed in the country for nine months and lasting for 12 months until May 2020.
While the last recession in the United States began in February 2020 and ended in April of the same year, making it the shortest since 1980, it lasted only two months.
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