The Mexican economy registered an annual fall of 18.7% in real terms and with seasonally adjusted figures in the second quarter of the Great Confinement year, reported the National Institute of Statistics and Geography (Inegi).
With revised Gross Domestic Product (GDP) figures, it remains in the historical record as the sharpest fall for economic activity in a second quarter, a consequence of social distancing measures and voluntary business closures to limit the speed of Covid-19 contagion.
The GDP contraction in the second quarter of the year was two tenths lower than Inegi's timely estimate released 20 days ago, when it projected the collapse to be a historic 18.9 percent.
The president of Inegi, Julio Santaella, posted on his Twitter account @SantaellaJulio that "to put the contraction of Mexico's GDP during the 2020-Q2 confinement (-17.1% q/q) in historical context, one has to go back 10 years to observe the same level of product."
Strategists from the consulting firm Pantheon Macroeconomics and Bank of America Securities specify that the depth of the collapse is also explained by the absence of a solid countercyclical fiscal policy and by the weakness that the Mexican economy was already experiencing due to domestic decisions that have discouraged investor and consumer confidence.
The collapse of economic activity in the second quarter exceeds the declines of the second quarter of 1995 (-8.6%) and the same period of 2009 (-7.7 percent).
In its quarterly comparison, that is, compared to the performance in the first quarter of the year, the drop was 17.1% in the April-July period, accumulating five consecutive quarters of contraction.
Entertainment and accommodation services lead impact
In the breakdown of the information, Inegi showed the collapse of all economic activities, led by the services sector.
According to its data, in the second quarter of the year there was a 25.7% drop in secondary activities, in its annual record.
This segment includes activities such as mining; electricity generation, transmission and distribution, water and gas supply, construction and manufacturing industries, which together and under normal conditions, contribute 31.6% of GDP, according to Barclays estimates.
In the breakdown, it is observed that the most affected sectors were entertainment and cultural services (-46.7%) as well as accommodation and food preparation (39.6 percent).
Trade and transport, also down
Meanwhile, tertiary activities completed an equally historic collapse of 16.2 percent.
This segment includes trade, transport, postal and storage services, mass media information, financial and insurance services, professional and scientific services, rental of tangible and intangible goods, educational, entertainment and cultural services, as well as legislative activities.
And finally, primary activities, which had been the only ones with positive registration in previous quarters, were dragged down to a 0.2% collapse in the annual comparison.
This includes activities such as agriculture, animal husbandry, forestry, fishing, and hunting.
Half-year collapse
The final GDP data for the second quarter of 2020 implies that the annual contraction for the first half of the year stood at -10.4% with seasonally adjusted series.
As with the second-quarter figure, the six-month collapse is historic for a similar period since records began. During the first part of the year, secondary activities recorded a 14.4% collapse compared to the same period of the previous year, with seasonally adjusted figures.
While tertiary activities experienced the second largest collapse, at 8.7% also between January and June in its annual comparison.
And primary activities were the only ones that avoided a fall, but with a minimal positive performance of 0.1 percent in the semester.
The GDP collapse in the semester surpassed in depth the historical -6.69% of 2009 and that of 1995, when the economy completed a fall of 5.30 percent.
