Mexico's Economy Records Worst Performance since Great Depression

Mexico's economy recorded in the second quarter of the year its highest quarterly contraction since the Great Depression, although it partially recovered in June, the coronavirus pandemic restrained trade, tourism and closed factories.

Data from the National Institute of Statistics and Geography (INEGI) on Wednesday showed that gross domestic product (GDP) fell 17.1% in the April-June period compared to the first quarter, and 18.7% compared to the second quarter of last year.

"The data for the second quarter confirm that the Mexican economy recorded the worst quarterly decline over the past eight decades, after the crash in 1932 caused by the Great Depression," said Alfredo Coutino, an economist at Moody's Analytics.

Coutino added that the pandemic, which infected 568,621 and killed 61,450 in the country, dealt a more severe blow to the Mexican economy than its counterparts in Latin America due to the lack of preparedness of the health care system and the absence of incentive measures to mitigate the repercussions on companies and families.

In a positive sign, Mexico's economic activity rose 8.9% in June compared to a month earlier, confirming the estimates of President President Andres Manuel Lopez Obrador  that the economy 'reached the bottom' in April and May, yet, GDP has shrunk by 13.2% compared to its level in June 2019.

Mexico's economy is expected to contract by up to 10% or more this year, which the Finance Ministry and the central bank said would be the worst recession since the 1930s of the last century.