From abroad, the most dynamic component of aggregate demand

During the third quarter of the year, Mexican exports of goods and services became the most dynamic component of aggregate demand, growing 3.7% compared to the previous quarter, according to figures from the National Institute of Geography and Statistics (Inegi).

From July to September, gross fixed capital formation (private investment), private consumption and government consumption –the other three components of aggregate demand– had variations of 1.3%, -0.4% and -2.3%, respectively.

On the side of aggregate supply, the gross domestic product (GDP) contracted 0.4%, while imports of goods and services grew 2.2 percent.

During the first nine months of the year, exports of goods and services grew 7.9% compared to the same period of 2020, a figure lower than the 11.2% advance of gross fixed capital formation and 8.1% of private consumption, since these The regions were favored by a simpler comparative basis, as they suffered more from the Covid-19 crisis in 2020.

Last year, foreign trade was the component of aggregate demand in Mexico with the fastest reactivation, after the slowdown in economic activity in April and May to prevent a faster spread of Covid-19.

This was favored by the implementation of monetary transfers from the United States government to families, with the aim of alleviating the increase in unemployment. These measures increased household consumption capacity and Mexico benefited from the increased supply of products such as electronics and medical supplies.

After household consumption, exports of goods and services was the component of aggregate demand with the greatest contribution to Mexican GDP growth during the first three quarters of 2021.

Private consumption contributed 5.3 points of growth, exports 2.9 points, followed by gross fixed capital formation (2 points) and government consumption (0.1 points); while imports subtract 5.4 points.

The balance is a GDP growth of 6.1% from January to September compared to the same period of 2020.

Exports are also the second largest component of aggregate demand, since they contribute 27.9%, while private consumption contributes 45.5%, according to the computation of the first nine months of the year.

For its part, private investment contributed 14% and government consumption, another 8.5 percent.

After the entry into force of the North American Free Trade Agreement (NAFTA), foreign trade and, in particular, trade with the United States, became a leading component of the Mexican economy, a fact that is shaping up to survive, after the update of the trade protocol with the Mexico-United States-Canada Treaty, which entered into force in July of last year.

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