Mexico's Secretary of Finance, Edgar Amador, acknowledged that the country's economic growth of just 0.3% in the third quarter was 'a weaker result than expected.' He also stated that the cancellation of 13 air routes to Mexican airports will have a relatively temporary economic impact. According to opportunistic GDP data published this Thursday by the National Institute of Statistics and Geography (INEGI), the secondary sector contracted by 2.9% year-on-year in the third quarter, while the primary and tertiary sectors grew by 3% and 0.9%, respectively. 'The contraction is focused on industrial activity, which accounts for just over 17% of GDP, and within it, on manufacturing, which has been affected by the accumulation of the consequences of the change in North American trade policy,' explained the official. He clarified that this is not a widespread or prolonged phenomenon and that the main reasons for the slowdown are commercial uncertainty in the international environment and the direct and tangible effects of a set of tariffs that affected global value chains, especially in the production of auto parts and heavy trucks. Amador also pointed out that the impact is tangible in Gross Fixed Capital Formation, whose sluggishness reflects corporate caution in investing in an uncertain environment. In turn, head of the Economic Planning Unit of the Ministry of Finance, Rodrigo Mariscal, forecast an improvement for the next quarter, 'since business confidence indicators are showing positive signals.' He also added that the impact of recent floods in Puebla, Veracruz, and Hidalgo is difficult to estimate, but so far it has been minor. 'Our assessment is that in July the contraction was greater than expected, and the recovery of the last two months has not been enough to compensate for that stumble,' he added. Mariscal expressed confidence that 'an appropriate and timely agreement will be reached.'
