Sluggish Growth and Uncertainty: Mexico’s Economy in Q1 2021
Mexico’s economy experienced growth in the first quarter of 2021, albeit at a slower rate compared to the previous three months, according to preliminary estimates from the national statistics agency INEGI. The country’s GDP expanded by 0.2% quarter-on-quarter, slightly above the 0.0% expected by economists. This growth was mainly driven by an increase in services, but it was offset by a decline in the primary sector.
On a yearly basis, Mexico’s economy grew by 1.6% compared to the same period last year, which is lower than the 2.5% posted in the previous quarter and below the projected 2.1% growth rate. Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, stated that the figures confirm a deceleration in economic growth in Q1 due to various challenges such as tighter financial conditions and difficult external conditions.
Despite this slowdown, Mexico’s economy has now seen expansion for ten consecutive quarters. Abadia noted that while there has been some growth momentum recently, it appears sluggish compared to recent trends. The data also indicated that increased infrastructure spending and pre-election support to households were not enough to offset the challenges faced by the economy.
In conclusion, Mexico’s economy showed mixed results in Q1 with positive quarterly growth but slower yearly growth compared to previous periods. The challenges faced by the economy have impacted overall growth momentum and are likely to continue affecting future economic performance.
The Mexican economy is facing several obstacles that are negatively impacting its growth prospects for 2021 and beyond. These include external factors such as trade disputes with the US and uncertainty about Brexit’s effects on global trade flows.
Additionally, domestic issues such as political instability and social unrest are creating an uncertain business environment for investors and businesses alike.
In conclusion, despite positive quarterly growth in Q1
