In our opinion –and according to what the estimates suggest– the pace of activity in the second quarter will moderate. However, it would manage to remain positive given solid fundamentals and a certain dynamism in the industry”
Banorte
The growth of the Mexican economy lost momentum in May, according to data released by the National Institute of Statistics and Geography (Inegi) on the results of the Global Indicator of Economic Activity (IOAE).
In the fifth month of the year, where an important economic spill usually occurs on May 10, the IOAE showed a monthly growth of just 0.1%, a figure lower than the result of April of 0.8 percent.
“With the estimated monthly progress in April and May, economic activity in the fifth month of this year would have reached its maximum post-pandemic level, but it would still be below the pre-pandemic level (January 2020)”, highlighted the organization Mexico How are we going? ?
According to Banorte strategists, the moderation in May would be consistent with the recent economic data that has been published, suggesting a more challenging environment for the Mexican economy in the face of disruptions in value chains, as well as inflationary pressures.
In fact, at the beginning of May the Mexican government announced the Package against Inflation and Famine (Pacic) which seeks to control the prices of 24 basic products to avoid further damage to Mexican pockets.
The Mexican economy, like that of the rest of the world, is facing a complicated situation where the Covid-19 pandemic continues, while there are geopolitical tensions in Europe, and inflation is putting various economies in check.
In this vein, in recent weeks various agencies have revised inflation expectations upwards and economic growth expectations downwards, while the Ministry of Finance and Public Credit (SHCP) maintains its GDP estimate of 3.4% for this year.
Within the Inegi report, it was observed that the May result was due to the weak performance shown by the activities that make up the economy, such as the secondary and tertiary sectors, which are those measured by the IOAE.
In the case of the industrial sector, the Inegi reported a monthly growth of just 0.2%, lower than the April figure of 1.0 percent.
The services sector, which was one of the most affected by the Covid-19 pandemic, had a monthly increase of 0.1 percent. The previous month, forecast growth is 1.0 percent.