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Mexico's economy contracts 6.2 pct in 3Q, beating expectations
Mexico City, Nov 21, 2009 (EFE via COMTEX) --
Mexico's gross domestic product fell
by 6.2 percent in the third quarter relative to the same period of
2008, beating analysts' expectations, the Inegi statistics institute
reported.
Inegi also said Friday that, excluding seasonal factors, the
country's GDP rose 2.93 percent in the July-September period
compared to the previous quarter, indicating an end to the
recession.
On a year-on-year basis, services fell by 6.5 percent, industrial
production was down 6.6 percent and "primary" activities
(agriculture and livestock) were off by 1.1 percent.
But on a quarter-on-quarter, seasonally adjusted basis,
industrial production rose 2.14 percent relative to the second
quarter, while services rose 4 percent and agricultural and
livestock production declined 2.56 percent.
Analysts last month had forecast a decline of 6.7 percent in the
third quarter, a 3.5 percent drop in the fourth and a 7.2 percent
contraction for all of 2009.
Accumulated GDP fell 8.1 percent in the first nine months of the
year, product of a drop of 9.3 percent in industrial production, an
8 percent drop-off in services and a slight rise of 0.9 percent in
the primary sector.
The Mexican economy began shrinking at the end of 2008, with a
1.6 percent drop in gross domestic product in the fourth quarter.
The GDP decline continued in the first two quarters of this year,
falling 8.2 percent and 10.2 percent, respectively.
Mexico, which has been hammered by a drop in exports to the
United States and lower remittances amid the global financial
crisis, as well as a worrying decline in oil production and
oil-export revenues due to insufficient investment in that sector,
is trying to retain the investment-grade credit rating it has
enjoyed throughout this decade.
President Felipe Calderon earlier this month announced that
third-quarter GDP had risen relative to the second quarter and that
therefore Mexico had climbed out of its worst recession in decades.
"This result is very good news because it indicates the end of
the recession, of the economic contraction in the country and we're
working hard so this recovery continues and broadens in the coming
years," the head of state said Nov. 5 at the inauguration of the
Bloomberg Mexico Economic Forum in this capital.
During his appearance at the forum, Calderon predicted that
Mexico's economy would rebound to grow 3 percent next year and
achieve growth rates of 5 percent in 2012, when the president's
six-year term ends.
"We're determined to make our economic forecasts a reality. And
beyond that, we want the country to be able to achieve sustained
growth rates in the future," Calderon said.
With that goal in mind, he pledged continued prudence in the
"handling of macroeconomic variables" as the country works to shore
up troubled public finances that have been depleted by a fall in tax
collection and a steady decline in oil output, Mexico's No. 1 source
of revenue.
The president also pointed to a rosier employment picture, saying
that "80,000 new net (formal) jobs" were created in the country in
October, marking the fifth consecutive month that employment has
risen.
But Calderon also said that "structural solutions" were needed to
tackle the country's "structural problems" and, in that regard,
congratulated Congress for passing the revenue portion of his
administration's 2010 budget bill.
Lawmakers agreed to raise taxes on most consumer goods, though
not food and medicine, and to hike income taxes for the highest
earners, among other changes.
Many analysts, however said that the measures were not enough to
shore up Mexico's public finances and broaden the country's tax
base, suggesting a possible credit downgrade by rating agencies.
The Organization for Cooperation and Economic Development said
Thursday that the Mexican economy will not recover to pre-crisis
levels until 2012.
Meanwhile, Nobel Prize-winning economist Joseph Stiglitz said
this week in Mexico City that the Mexican government's response to
the global economic crisis was among the worst in the world, adding
that "the combination of a very weak recovery in the United States
and a fiscal policy that doesn't stimulate the Mexican economy is
worrying." EFE
jrm/mc
Copyright (C) 2009. Agencia EFE S.A.
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