Mexico confirms 0.2% Q1 economic shrink in blow to president AMLO
MEXICO’S economy contracted by 0.2 per cent in the first quarter of the year, revised government data confirmed on Friday, a rough start for new President Andres Manuel Lopez Obrador.
The contraction raises the spectre of recession just months into the antiestablishment leftist’s six-year term, threatening his promise to “transform” the country and deliver average annual GDP growth of four per cent.
The revised number for January to March was the same as the preliminary figure released in April, which took economic analysts by surprise and triggered talk of a possible recession – two or more consecutive quarters of contraction – in Latin America’s second-largest economy.
Mexico’s economy registered zero growth in the fourth quarter of last year, according to the national statistics institute, Inegi.
Lopez Obrador – widely known as “Amlo” – downplayed the data.
“There’s still time” to reach his target of two per cent growth for this year, he told a press conference.
“I’ve placed my bet, I’m not backing down. Let’s just wait and see how the year ends.”
Lopez Obrador won a landslide victory in Mexico’s elections last year, taking office in December with a strong mandate.
But the economy threatens to be his Achilles’ heel. He has triggered backlash in the business world with some of his policies, including a controversial decision to cancel a $13 billion Mexico City airport project that was already one-third complete.
The central bank and finance ministry cut their economic growth forecast for this year by four per cent in April, to a range of 1.1 to 2.1 per cent.
Mexico also announced a trade surplus of $1.37 billion for April, fuelled by an 11.7 per cent increase in exports to the US.
Mexico was the largest US trading partner in the first three months of the year, despite US President Donald Trump’s repeated threats to tear up the two countries’ trade agreement and close their shared border.
That was mainly thanks to Trump’s trade dispute with China, which previously held the top spot.