Mexican economy likely contracted 8.8% during 2020: Reuters poll

MEXICO CITY (Reuters) - Mexico’s economy likely suffered its largest contraction in decades in 2020 as measures to curb the spread of the novel coronavirus battered output, a Reuters poll showed on Tuesday.

The median forecast of a poll of 12 analysts was that Mexico’s gross domestic product (GDP) shrank by 8.8% last year, in what would be the largest contraction since the Great Depression in the 1930s.

The forecast assumes the Mexican economy grew by 2.8% in the fourth quarter in seasonally adjusted terms, compared to the previous three-week period.

Data from the statistics agency showed that in the third quarter, GDP grew 12.1% after contracting 17% in the prior quarter.

“The contraction of the Mexican economy during the epidemic is much bigger than that of other recent crises,” said Alfredo Coutino, head of Latin America Economic Research at Moody’s Analytics.

The contraction would be the second-deepest since the start of the 20th century, after a 14.8% decline in 1932, he said.

In unadjusted terms, GDP likely contracted 5.4% on the year in the fourth quarter, the poll showed. Analysts also predicted a GDP growth rate of 3.8% for 2021.

Mexico’s statistics agency INEGI will report a preliminary fourth-quarter GDP figure on Friday.

Reporting by Miguel Angel Gutierrez; Additional reporting by Gabriel Burin in Buenos Aires; Editing by Sonya Hepinstall