Mexican Economy Barely Grew in Third Quarter

Anthony Harrup. Wall Street Journal. October 30, 2019

MEXICO CITY—Mexico’s economic activity expanded modestly in the third quarter amid weakness in industrial production and a slowdown in services, keeping the economy on track this year for its weakest performance in a decade.

Gross domestic product, a measure of output of goods and services, expanded 0.1% in seasonally adjusted terms from the second quarter, the National Statistics Institute said Wednesday.

Industrial production shrank 0.1%, services were unchanged and agricultural production grew 3.5%.

It was the first quarter this year in which the economy showed any growth, after GDP contracted in the first quarter and was flat in the second.

GDP was down 0.4% from the third quarter of 2018.

In the first nine months of the year, GDP was flat compared with the same period of 2018. The lack of growth leaves the economy on track for its worst showing since the recession of 2009.

The slowdown, amid declines in both public and private investment, poses a challenge for the government of President Andrés Manuel López Obrador in his first year in office as he seeks to increase social spending while keeping a lid on budget deficits.

“It’s clear that the economy is very weak and that services—which previously had been the strong point in the economy—are now faltering,” Capital Economics chief emerging-markets economist William Jackson said in a note. “Although we think the economy will strengthen in the coming quarters, these data reinforce our downbeat view.”

Revised third-quarter GDP numbers are due on Nov. 25.