MEXICO CITY – Mexico’s gross domestic product shrank 0.1 percent in 2019 relative to the previous year due to a drop in industrial output, the National Institute of Statistics and Geography (INEGI) said on Tuesday.
That result marked the first full-year contraction of Mexico’s GDP since the 2009 global recession.
The economy shrank due to a 1.8 percent decline in industrial production and in spite of growth in the agricultural and services sectors of 1.9 percent and 0.4 percent, respectively, INEGI said in a statement.
Tuesday’s definitive GDP number matched the preliminary result that the institute released on Jan. 30.
Mexico’s economy also contracted by a seasonally adjusted 0.1 percent in the fourth quarter compared to the previous three-month period.
Between October and December, industrial output fell 1.2 percent and the agriculture, livestock and fishing industries contracted by 1.1 percent. By contrast, the services sector rose 0.2 percent compared to the July-September period.
That fourth-quarter GDP figure was downwardly adjusted after preliminary numbers from Jan. 30 showed flat growth.
Mexico’s economy contracted by 0.1 percent in three straight quarters between the end of 2018 and the middle of last year. The slight GDP contraction in 2019 was in line in with forecasts by government agencies and private-sector economists.
Also Tuesday, INEGI’s Global Indicator of Economic Activity, which provides information on the short-term evolution of Mexico’s real economy, rose 0.7 percent in December compared to the previous month.
The GDP of Latin’s America’s second-biggest economy (after Brazil) expanded by 2.6 percent in 2015, 2.9 percent in 2016 and 2.1 percent in both 2017 and 2018.
Private-sector economists consulted by Mexico’s central bank are forecasting 1.08 percent growth in 2020, while the World Bank expects the country’s GDP to rise by 1.2 percent as investment spending ticks up.
Mexico’s Finance and Public Credit Secretariat is forecasting growth of around 2 percent this year.
Mexican President Andres Manuel Lopez Obrador, who took office in late 2018, says economic activity will rebound once the new trade agreement linking Mexico, the United States and Canada is fully ratified and takes effect and structural changes being carried out by his administration start taking hold.