MEXICO CITY (Reuters) -Mexico’s economy last year suffered its biggest annual contraction since the 1930s, although it recovered better than expected from the ravages of the COVID-19 pandemic during the final quarter, preliminary data showed on Friday.
Gross domestic product in Latin America’s second-biggest economy tumbled by 8.5% last year in seasonally adjusted terms, according to the preliminary estimate issued by national statistics agency INEGI. The fall was slightly shallower than the consensus forecast in a Reuters poll for an 8.8% decline.
Still, the contraction was the sharpest since 1932 during the Great Depression, data published by the National Autonomous University of Mexico (UNAM) show. And the economy has recently faced fresh headwinds due to a resurgence in COVID-19 cases.
During the second half of 2020, the economy made up much of the ground lost to the pandemic, and an unexpectedly robust performance in the October-December period helped lift the peso against the dollar early on Friday.
But the economy remains a major challenge for President Andres Manuel Lopez Obrador, whose efforts to strengthen the state’s hand in the energy market have led to disputes with businesses and upset Mexico’s allies, chilling investment.
The second quarter bore the brunt of economic disruptions caused by the pandemic, before a sharp increase in infections towards the end of 2020 led to renewed commercial restrictions in the Mexico City metropolitan area before Christmas.
That is expected to dent the recovery in early 2021, which has seen deaths from coronavirus hitting record levels. Lopez Obrador himself contracted COVID-19 this month.
During the final three months of 2020, GDP advanced by 3.1% from the previous quarter in adjusted terms, beating the prediction for 2.8% growth seen in a Reuters poll.
Nikhil Sanghani, an economist at Capital Economics, said the figures for the fourth quarter meant that Mexico had recouped more than 70% of its losses from the first half of 2020.
“However, the recent surge in new COVID-19 cases will cause the recovery to grind to a halt in Q1,” he said.
A breakdown of the unadjusted 2020 GDP figures showed manufacturing took the biggest hit last year. Secondary activities, which encompass factory output, fell by 10%, while tertiary activities, which include services, declined by 7.7%.
By contrast, primary activities such as farming, fishing and forestry, rose by 2.0% from 2019, the data showed.
The latest data also showed that 2020 was the second year running in which the economy went backwards. In 2019, the economy shrank by 0.1% in unadjusted terms, INEGI said.
Manufacturing activity has bounced back quickly from the depths of the slump, but companies are still wary about investing in new factories, buildings and machinery.
In the ten months through October, which is the latest data available, gross fixed investment was down by 19.5% compared with the same period in 2019, INEGI data show.
Goldman Sachs economist Alberto Ramos said in a client note that the outlook remained challenging for Mexico, though the rollout of a vaccination program would help the recovery.
“Firmer U.S. growth, stronger terms of trade, and additional moderate monetary policy easing should leverage the recovery,” Ramos said. “With the better than expected fourth quarter 2020 print we now expect real GDP growth to firm to 4.0% in 2021.”
(Reporting by Dave Graham; additional reporting by Abraham Gonzalez; editing by Jason Neely, Barbara Lewis and Nick Macfie)
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets also climbed higher.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
This report by The Canadian Press was first published Sept. 13, 2024.
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in the base metal and energy sectors, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 172.18 points at 23,383.35.
In New York, the Dow Jones industrial average was down 34.99 points at 40,826.72. The S&P 500 index was up 10.56 points at 5,564.69, while the Nasdaq composite was up 74.84 points at 17,470.37.
The Canadian dollar traded for 73.55 cents US compared with 73.59 cents US on Wednesday.
The October crude oil contract was up $2.00 at US$69.31 per barrel and the October natural gas contract was up five cents at US$2.32 per mmBTU.
The December gold contract was up US$40.00 at US$2,582.40 an ounce and the December copper contract was up six cents at US$4.20 a pound.
This report by The Canadian Press was first published Sept. 12, 2024.
