Gabriela Siller, a top analyst at BASE Bank, said that recovery would be slow after the historic fall in GDP.
MEXICO CITY (Reuters/Banco Base) – After a historical contraction of the Mexican economy, the total recovery could take up to 11 years, according to Gabriela Siller, director of Economic and Financial Analysis of Banco BASE.
Siller stressed that this is the fifth consecutive quarter with a drop in Mexico’s Gross Domestic Product, “something that had only happened from the last quarter of 1985 to the last quarter of 1986, after the Mexico City earthquake”.
Es muy probable que se haya tocado fondo en el 2Q, pero se espera una lenta recuperación económica para México. En el mejor de los escenarios tomará 4 años recuperar el PIB pre crisis. En el escenario más probable tomará de 6 a 11 años la recuperación total.— Gabriela Siller (@GabySillerP) July 30, 2020
“It is very likely that the bottom has been reached in 2Q, but a slow economic recovery is expected for Mexico. In the best case scenario it will take 4 years to recover pre-crisis GDP. In the most likely scenario it will take 6 to 11 years to fully recover”.
Mexico’s economy recorded a historic contraction in the second quarter due to the slowdown in productive activity by the coronavirus pandemic. Official data showed Thursday.
The Gross Domestic Product (GDP) sank 17.3% between April and June, compared to a fall of 1.2% in the first quarter of the year, according to preliminary figures released Thursday by the National Institute of Statistics and Geography (INEGI).
The statistics institute will publish final GDP data for the second quarter on 26th August. If confirmed, this would be the most profound decline since 1993, the oldest period for which Inegi has data for this indicator.