Mexico’s economy shrinks in oil slump

MEXICO CITY — Mexico’s economy contracted 0.2 percent in the second quarter from the prior three months — but not as much as calculated last month — as growth in the services industry slowed and exports fell.

Gross domestic product shrank 0.2 percent, the first drop in three years, according to a report from the national statistics institute Monday. Preliminary figures on July 29 had shown a 0.3 percent decline. From the previous year, GDP climbed 2.5 percent, compared with the 2.4 percent median estimate of economists surveyed by Bloomberg.

Mexico has been hit by a slump in exports to the U.S., as well as falling oil prices and production that forced the government to cut spending. Adding to the problem is a slower expansion in domestic demand that had been the main source of growth for previous quarters in Latin America’s second-largest economy.

Falling output at state-owned oil producer Petroleos Mexicanos has been one of the main drags on the economy. The company extended more than three years of losses in the second quarter as a cash injection from the government failed to overcome the pinch of record-low crude output, refinery upsets and a petrochemical plant explosion. The company’s exploration was crimped by a reduction in its spending in the first quarter.

— Bloomberg News