By Anthony Harrup
MEXICO CITY – Mexico’s economic activity contracted in the third quarter of the year, halting the recovery after four consecutive quarters of growth, the National Statistics Institute said Thursday.
Gross domestic product, a measure of the production of goods and services, fell 0.4% in seasonally adjusted terms from the second quarter, a larger contraction than the 0.2% decline previously reported.
Services fell 0.9% and industrial production increased 0.3% from the previous quarter, while agricultural production increased 1.3%. Services and industrial production were revised downwards from the preliminary estimate released at the end of October.
Industrial activity has been affected by global supply chain bottlenecks and semiconductor shortages which have particularly hit the auto industry, which accounts for around 18% of the country’s manufacturing output and a third of its exports of manufactured products.
Services were hampered in the quarter by a third wave of coronavirus infections that resulted in some capacity restrictions in restaurants, stores and other public places.
GDP had grown in each of the quarters since the record contraction in the second quarter of 2020 amid widespread shutdowns of industry and services due to the coronavirus.
Slower growth could reduce government revenues, pushing up public debt ratios, while preventing the central bank from accelerating the pace of its monetary tightening in the face of rising inflation, said Vector Casa de Bolsa , which recently lowered its economic growth forecast for 2021 to 5.8% from 6.1%.
GDP grew 4.5% unadjusted from the third quarter of 2020 and 6.1% in the first nine months of the year.
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