Mexico: Third reading shows GDP recorded sharpest contraction since Q2 2020 in Q3
GDP declined 0.4% on a seasonally-adjusted quarter-on-quarter basis in the third quarter, contrasting the 1.2% expansion logged in the second quarter. Q3’s reading marked the sharpest drop since Q2 2020, with activity weighed on by surging Covid-19 cases and the impact of the law restricting labor outsourcing.
Private consumption contracted 0.4% in Q3 (Q2: +1.7% s.a. qoq). Government spending dropped 2.3% (Q2: +3.3% s.a. qoq). Meanwhile, fixed investment growth fell to 1.3% in Q3 (Q2: +1.4% s.a. qoq).
Exports of goods and services bounced back, growing 3.7% seasonally-adjusted quarter-on-quarter in the third quarter (Q2: -0.9% s.a. qoq). In addition, imports of goods and services growth picked up, expanding 2.2% in Q3 (Q2: +0.1% s.a. qoq).
On an annual basis, economic growth moderated to 4.5% in Q3, following the previous period’s 19.9% growth.
Looking to Q4, flash estimates for economic activity in October and November suggest that the economy gained steam, as Covid-19 infections fell and the impact of the outsourcing law likely faded.