Mexico’s economy, the second largest in Latin America after Brazil, grew 5% in 2021, according to preliminary figures released Monday by the statistics institute Inegi.
This is a rebound after the 8.4% collapse that the economy had in 2020, affected by the coronavirus pandemic.
Inegi added that in 2021, industrial activity, which represents 30% of GDP, grew 6.8%. The services sector, which represents 60% of the economy, advanced 4.2% and primary activities grew 2.7%.
However, the Mexican economy ended up weakened at the end of last year. In the fourth quarter, economic activity fell 0.1% after a decline of 0.4% in the immediately preceding quarter.
In the fourth quarter of 2021, the Timely Estimate of Gross Domestic Product #PIB reported a decrease of 0.1% compared to the immediately previous quarter; at an annual rate showed a real increase of 5% (seasonally adjusted figures) https://t.co/Vs5yoBJadd #INEGI #ComunicadoINEGI pic.twitter.com/5wEifcAJi5
— INEGI INFORMA (@INEGI_INFORMA) January 31, 2022
In that period, the economy was dragged down by a decline of 0.7% in the services sector and an advance of only 0.4% in industrial activity.
“The 0.1% drop in Mexico’s GDP in the last quarter confirms that the economy fell into a recession in the second half of 2021 and we believe growth this year will be weaker than expected,” Analysts at Capital Economics wrote in a note to clients.
In its annual comparison, the economy grew 1% in the last quarter of last year compared to the same period in 2020.
The Mexican economy was hit hard in 2020 by the closure of activities brought by the COVID-19 pandemic, which has left in the country 4.9 million infections and 305,893 deaths.
Read: A double challenge for the Mexican economy
To deal with the economic emergency, the government of President Andrés Manuel López Obrador avoided giving fiscal support to companies and instead concentrated on social programs and their infrastructure works such as the new airport for Mexico City and a refinery in the southeast of the country.
For this year, private analysts regularly surveyed by the autonomous central bank expect the economy to grow 2.7%.
On February 25, Inegi will release the final figures for economic growth.
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