Finance

Mexican economy takes tiny step forward in third quarter

MEXICO CITY (Reuters) – Mexico’s economy grew by 0.1 percent in the third quarter compared with the previous three-month period but fell short of market expectations, a preliminary estimate from the national statistics agency showed on Wednesday.

The seasonally-adjusted increase compared with a forecast of a Reuters poll of economists for gross domestic product (GDP) to expand by 0.2% in the July-September period after the economy stagnated in the second quarter.

Compared with the same quarter a year earlier, the economy shrank by 0.4 percent when measured in both seasonally adjusted and unadjusted terms, the statistics agency said.

The result was the first annual decline in GDP in adjusted terms since the final quarter of 2009, a year in which Mexico suffered a sharp recession brought on by the financial crisis.

A breakdown of the data showed that secondary activities, which include manufacturing, slipped one-tenth of a percentage point from the previous quarter, while services stagnated and the category that covers farming, fishing and mining grew 3.5%.

Mexico has been flirting with recession since President Andres Manuel Lopez Obrador took office in December pledging to ramp up economic growth to an average of 4% per year. The economy contracted during the first quarter.

Investor confidence in Mexico, Latin America’s second largest economy, has been shaken by some policy moves made by Lopez Obrador, a leftist exponent of economic nationalism.

In particular, his decision to cancel a partly built, $13 billion airport for Mexico City and his retreat from the prior government’s opening of the oil and gas industry to private capital have raised doubts about his economic credentials.