Mexico’s economy is obviously stagnant and at least for decades with a debt shortage problem. There is a tendency for the discussion to be more open to the label of recession, affirmed by the Governor of the Bank of Mexico, Jonathan Heath.
The last time the economy recorded a 5% increase was over the course of a couple of years, reaching the finals of the 90s. Between 1996 and 1997, the Mexican GDP contracted an expansion of 6.7% and 6.8%, respectively, in line with World Bank information.
Interviewed by The Economist, it seems that there are few elements to identify fully if the economy is located in a ligament recession or in a standstill. For example, the preliminary estimate of GDP is to explain the 0.1% balance in the GDP of the last quarter of 2021, which has been rising since July for third-party activities.
The contraction of the league activities to the subcontracting of services, which he registered as 30% since August, has been partially impacted by the entry into force of the Labor Reform, evidence.
In an absolutely intuitive manner, we can assume that without the Labor Reform, the case that is presented in the activities of outsourced league services is not completed completely.
I understand that “in no way can we say that we have a generalized cycle in all sectors, as that corresponds to the classical definition of a recession, that no single center of the third sector has a fixed cycle between the 15 activities that it integrates. Here is the case of the business, which also forms part of this segment and is maintained with positive growth ”.
Agreeing with the governor, a classic recession, as defined by the National Bureau of Economic Research, has to do with at least three criteria: duration, depth and dispersion. The Mexican economy, it seems, has complied with a single one of them, which is the duration.
Considering that, statistically speaking, it is very difficult to confirm that a negative tax rate of 0.1% is significantly different at night. Entries are not accompanied by the second criterion of a classic recession, but we do not have a continuous period, “ni abismal”, as already presented in the second quarter of 2020, during the so-called “pandemic recession”.
Inflation with a stable economy
Heath described a description of inflation during the period in which it was presented in Mexico, where “inflation has been a serious problem”, having read at levels of 7%, not seen in 20 years, in a context of expansion.
When an economy does not rise or fall, suelen bears the pressure on inflation. But if the economy is declining and as far as inflation is concerned, we are facing a more rare phenomenon, which can also be documented as a crisis.
Reference-www.eleconomista.com.mx