Business

Mexican economy shrinks record 17.3% in April

Mexico's economy posted a record contraction in April, official data showed on Friday, as the effects of the coronavirus lockdown devastated economic activity, particularly in manufacturing.

Manufacturing sector swoons over weight of coronavirus lockdown

Auto production in Mexico fell by 98.8% in April compared to the same month in 2019, and could drop by more than a third in 2020. (Pedro Pardo/AFP/Getty Images)

Mexico's economy posted a record contraction in April, official data showed on Friday, as the effects of the coronavirus lockdown devastated economic activity, particularly in manufacturing.

Adjusted for seasonal swings, Latin America's second-biggest economy contracted 17.3 per cent from March, the biggest fall since modern data began being published in early 1993, according to figures put out by national statistics agency INEGI.

The decline, however, was not as sharp as the 19.4 per cent drop forecast by a Reuters poll of economists.

In unadjusted terms, the economy shrank 19.9 per cent in April compared with a year earlier, the figures showed.

People walk on the street in Mexico City as the outbreak of COVID-19 continues. The country's health officials say more than 25,000 coronavirus deaths and 200,000 cases have been recorded since the pandemic started. (Carlos Jasso/Reuters)

A breakdown of the data showed that primary activities such as farming, fishing and mining shrank 6.4 per cent from March. Secondary activities, which include manufacturing, plummeted 25.1 per cent and tertiary activities, which cover the service sector, fell 14.4 per cent.

Auto production almost ground to a halt in April, falling by 98.8 per cent on the year, and the country's main industry group has forecast output in the sector could drop by nearly a third in 2020.

The government hopes the economy fared slightly better in May, when authorities gradually began to permit sectors such as carmaking, mining and construction to start up again. 

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