Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Mexican economy grows strongly on U.S. demand, services

Economic Indicators Jul 30, 2021 10:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
2/2 © Reuters. FILE PHOTO: People walk past a building undergoing construction in Mexico City, Mexico January 30, 2020. REUTERS/Andres Martinez Casares 2/2

By Abraham Gonzalez

MEXICO CITY (Reuters) -Mexico's economy bounced back to annual growth in the second quarter, boosted by services and manufacturing for export to the United States, its top trade partner, a preliminary estimate from the national statistics agency showed on Friday.

Compared with the same quarter a year earlier, when the formal and informal economy was largely shut down by coronavirus pandemic restrictions, growth was 19.7%, the statistics agency said.

That was the first year-on-year quarterly growth since before the pandemic, and close to the number forecast in a Reuters survey of 14 analysts. [L1N2P21IX]

Hammered by restrictions brought about by the pandemic, Latin America's second-largest economy shrank 8.5% in 2020, its worst performance since 1932.

The current recovery has been led by demand from the United States for the cars and electronics made in Mexican factories, while remittances sent by migrants north of the border have helped domestic consumers.

However, Mexico's economy is still 3.6 percentage points below its peak in the July-September period of 2019, noted Gabriel Casillas, an economist at Mexican bank Banorte. The economy had contracted for half a year even before the coronavirus appeared in Mexico.

Quarter-on-quarter, seasonally adjusted growth was 1.5%, marking the fourth consecutive quarter of economic expansion. It was lower than the 1.7% forecast by analysts.

Goldman Sachs (NYSE:GS) economist Alberto Ramos said the quarterly expansion was crimped by supply chain disruptions and shortages of parts for key industries. A global crunch for computer chips has slowed factory output in Mexico. Ramos flagged risks ahead.

"We expect real GDP growth to reach 6.0% in 2021, but the recent deterioration of the COVID backdrop, high inflation and rising rates could slow down the envisaged recovery," Ramos said in a client note.

Secondary activities, which include factories, rebounded by 28.2% in the April-June period, while tertiary activities, including trade and financial services, were up 17.1%, the data showed.

Quarter-on-quarter, secondary activities rose a modest 0.4%, reflecting the supply problems, while tertiary activities were up 2.1%.

Mexican economy grows strongly on U.S. demand, services

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
Sign up with Email