In December, the Mexican economy experienced a decrease in its activity, with sectors such as primary, industrial, and tertiary registering monthly declines. The generation and distribution of energy, gas, and water also decreased. In the tertiary sector, retail and wholesale trade decreased, as did hospitality and restaurants.
Regarding employment, the Mexican Institute of Social Security reported a historic cut in jobs in the formal economy, with more than 400 thousand jobs eliminated. Annually, the Global Index of Economic Activity (IGAE) for December showed a contraction in agriculture, industry, and a slight increase in services.
In the fourth quarter, the decline in Gross Domestic Product (GDP) was due to a decrease in agriculture, industry, and marginal growth in services and commerce. Alerts about a possible recession increased, especially considering factors such as Donald Trump's arrival at the presidency of the United States and changes in Mexican legislation.
Despite this, surprising data from January showed progress in the automotive industry and growth in private consumption. The Timely Indicator of Economic Activity (IOAE) estimated an annual increase due to the recovery of consumption spending.
Although some indicators show improvements, there is growing concern about a possible recession. In transportation and storage, significant for e-commerce, there was a decrease. However, there are no signs of serious financial crises or exogenous factors that could trigger a deep recession.
In December, the IGAE reported a contraction in all three economic sectors, affecting oil production, construction, and manufacturing, with the latter being key for exports. Despite the current challenges, the Mexican economy has not suffered a financial crisis triggered by an external shock.
Recession remains a concern, as this phenomenon tends to perpetuate over time if effective measures are not taken. Hope rests on avoiding a prolonged economic depression.
