MEXICO (EFE) – Mexico’s gross fixed investment registered a 21.4% drop between January and June 2020 compared to the same period last year, dragged down by the coronavirus crisis, according to data from the National Institute of Statistics and Geography (Inegi) released on Monday.
“The gross fixed investment accumulated a severe annual contraction of 21.4% during the first semester of 2020 (original figures),” said Inegi”s president, Julio A. Santaella, on Twitter.
Inegi announced that this result was obtained due to a 24.1% fall in the machinery and equipment area and a 19.5% year-on-year reduction in construction.
In the sixth month of the year, gross fixed investment fell 24.1% year-on-year.
According to seasonally adjusted data, gross fixed investment recovered 20.1% in June compared to the previous month. June was the first month of the so-called new normality, a cautious social and economic reopening of the country.
In the sixth month, there was a rise in machinery and equipment of 25.8% and 13.7% construction compared to May. In 2019, gross fixed investment contracted by 4.9%, while it grew by 0.6% in 2018 and decreased by 1.5% in 2017.
According to Inegi, the gross fixed investment allows having “a wide knowledge” about the investment’s behavior in the short term. It consists of the assets used in the production process for more than one year and subject to property rights.
Mexico’s gross domestic product (GDP) contracted by 0.3% in 2019 due to the drop in industrial activity, which is a substantial decrease compared to the previous year’s 2.1% growth.
For this 2020, the pandemic has led most analysts and financial bodies to place the fall in GDP above 8%. In the second quarter of the year, there was a historic 18.7% year-on-year fall in GDP.
The Mexican Social Security Institute (IMSS) has reported the loss of more than 1.1 million formal jobs due to the pandemic, although, in recent weeks, jobs have already been created.
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