Mexico’s economic activity remains below pre-Covid-19 pandemic levels.
Although some annual comparisons reflect a revitalization, they should be viewed with caution, as they benefit from a low comparison base.
According to figures published by the National Institute of Statistics and Geography (Inegi) this Wednesday, the economic outlook for August and September does not look very promising.
The Just-in-Time (IOAE) Index of Economic Activity, which aims to provide guidance on the economy’s performance (before its official release), expects a real advance of 0.1% for September compared to August.
The Statistical Institute sees that this data can move in a lower range of -1.1 and an upper range of 1.2 percent.
Looking at the large main sectors of IGAE activity, for secondary activities, Inegi calculates a monthly decrease of 0.5%, while for the tertiary sector it estimates a monthly increase of 0.1%.
If the August and September data are confirmed, the economy will rotate 20 months below the 112 points it was at the beginning of 2020, before the restrictions and trade closures.
The official August figure will be released on October 25.
“While the US is already above it, Mexico is not above (its pre-pandemic economic activity),” said Carlos Lopez-Jones, director of consultancy on economic and financial trends.
In January 2020, the IGAE index reached 112.63 points, and in July of this year, the index reached 109 points.
Misleading annual vision
In its annual comparison, the IOAE expects a 5% increase in September 2021, compared to the same month the previous year. For the main large sectors of IGAE activity, an annual increase of 4% was calculated for secondary activities last September and for the tertiary sector an annual increase of 6.1%.
“This (comparison) is misleading because last year, in September, we were not sure about the Covid wave (…) we did not have vaccines either. I think the basis of comparison is very weak and it has nothing to do with the current situation.”
IGAE is a monthly indicator that allows to know the development of GDP, unlike the first, it is released on a quarterly basis.
For its part, the IOAE presents its IGAE estimates three weeks after the end of the month, thus expecting the release of official data and it is expressed with a higher and lower band.
The Ministry of Finance, in its General Standards for Economic Policy 2022, expects that the country’s economy will grow this year in the range of 5.8 to 6% and in 2022 in the range of 3.6 to 4.6 percent.
Meanwhile, the United States, Mexico’s main trading partner, will grow by about 6% in 2021 and 4.5% in 2022, which could have a negative impact on the national economy, Lopez-Jones added.