Mexican economy likely shrank 1.7% in first quarter: Reuters poll

MEXICO CITY (Reuters) – Mexico’s gross domestic product likely contracted in the first quarter of this year as the coronavirus pandemic put the brakes on economic activity, a Reuters poll showed on Monday.

The median forecast of a poll of 12 analysts is that Mexico’s GDP shrank 1.7% in seasonally adjusted terms during the January-March period compared with the prior quarter.

That follows a contraction of 0.1% in the fourth quarter last year.

In unadjusted terms, GDP likely contracted by 2.4% in the first quarter compared with the same period a year earlier, according to the poll.

Analysts also expect Latin America’s second-largest economy to contract 7.4% in 2020, after the economy shrank slightly in 2019, the first contraction in a decade in Mexico.

In a previous poll this month, analysts had predicted a contraction of just 5.1% in 2020, and a rebound in 2021 with 2.1% growth.

The Mexican government has said the economy could contract up to 3.9% this year, compared to an expansion of up to 2.5% estimated in the 2020 budget, in the midst of the coronavirus crisis that led to the declaration of a health emergency, and has claimed more than 1,350 lives.

Mexico’s statistics agency will report a preliminary first quarter GDP figure at 6 a.m. local time (1200 GMT) on Thursday.