Queen NwabuezeNew reports and statistics have confirmed that the Mexican economy has entered into a technical recession due to the effects of the coronavirus pandemic.
Reports say, trouble actually started for the country at the end of last year with two consecutive quarters of contraction despite annual growth of 5% for 2021.
Join our WhatsApp ChannelContinuing issues with the global supply chain have been a problem for Mexican assembly plants. Despite COVID-19 infections falling late last year and there being few health-related restrictions, the economy struggled.
According to the report: “The weakness of domestic production capacity has to do more with the structural damage caused by the pandemic and the lack of mitigation policies to help restore the level of productive investment,” said Alfredo Coutiño, Latin America director at Moody’s Analytics.
Coutiño warned that the weakening the country’s economy, experienced last year could have consequences for growth in 2022, adding that government measures to stifle competition have slowed private investment.
The National Institute of Statistics and Geography said, in the last quarter of 2021, the economy dropped 0.1% compared to the second quarter, when it shrank 0.4%.
Reportedly, the 5% overall growth in 2021 actually followed an 8.4% contraction in 2020 when the coronavirus pandemic descended on the economy.
The International Monetary Fund, IMF, has forecast that the Mexican economy will grow by 2.8% this year, while other analysts have said 2.7%.
Gabriel Yorio, Mexico Treasury Secretary said that the economy would continue to feel the cold hands of COVID-19 in this financial year of 2022.
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