Mexico’s economy shrinks in first quarter of 2020 (INEGI)

WSJ – MEXICO CITY (May 26, 2020)—Mexico’s economy contracted in the first quarter of the year, extending the 2019 downturn as the coronavirus pandemic started to affect industry and services, revised government data showed Tuesday.

Gross domestic product shrank 1.2% from the previous quarter in seasonally adjusted terms, the National Statistics Institute (INEGI) said Tuesday. Industrial output fell 1.2% and services were down 0.9%, while agricultural production increased 1.7%.

By reviewing Mexico’s previous figures it can be noted that the economy contracted by 0.6% during the last three months of 2019 and by 0.2% in each of the two prior quarters. The economy grew by 0.2% during the first quarter of 2019, the data showed.

INEGI previously said the economy contracted by a tenth of a percentage point in each of the four quarters last year.

Mexico did not apply lockdown measures to curb the spread of the novel coronavirus until late March, so the impact of the pandemic will weigh heavily on the second quarter.

The lockdown brought key sectors of Mexican industry to an almost complete standstill, and analysts estimate the economy will contract by up to 10% or more during 2020.