Mexico's economy shrinks for third quarter in a row

Mexico's economy contracted for three consecutive quarters following a downwards revision of figures, national statistics agency INEGI said today.

The economy shrank by 0.1pc for three consecutive quarters between October 2018 and June this year, while growth between July and September was flat against the previous period, INEGI said today.

Economists define two consecutive periods of negative growth as a recession.

President Andres Manuel Lopez Obrador had pledged to close out his first year in office, concluding this December, with 4pc growth.

Mexico's central bank has repeatedly slashed growth forecasts this year, expecting the economy to grow by just 0.2pc this year.

Moody's Investors Service expects growth to tick up next year but at 1.3pc it will remain well below the 3.1pc average seen over the past 12 years.

"Strong liquidity will help most Mexican companies navigate this downturn without significant deterioration, especially if the private sector grows accustomed to the new policy environment and spending recovers," Moody's said on 21 November.

Moody's points to the cancellation of upstream auction rounds and farm-outs as well as the renegotiation of natural gas pipeline contracts with state-owned CFE as two factors that have shaken investor confidence in Mexico this year.

By Rebecca Conan

source: Argus Media