Mexico’s economy shrank for the first time in more than four years in the third quarter, hit by two powerful earthquakes in September.
A preliminary estimate of a 0.2-percent contraction is the first quarter in the red for Latin America’s second-largest economy since the second quarter of 2013 reports AFP.
It has been a topsy-turvy year for Mexico, which faced economic anxiety a year ago when Donald Trump won the US presidential election after a campaign charged with anti-Mexican rhetoric, raising fears for the country’s key trade relationship with its giant northern neighbour.
Mexico shrugged off fears of catastrophe to post three quarters of moderate growth – 0.7 percent in both the fourth quarter of 2016 and the first of 2017, and 0.6 percent in the second quarter.
In late August, the central bank increased its annual growth forecast for 2017 to a range of 2.0 to 2.5 percent, up from its previous estimate of 1.5 to 2.5 percent.
But the peso, which plunged after Trump’s victory, has sunk again on uncertainty surrounding the testy negotiations on a new version of the North American Free Trade Agreement (NAFTA).
Economic adversity worsened with the earthquakes that rocked the country on September 7th and 19th, leaving 465 people dead and an economic cost of over US $2 billion.
Analysts are optimistic that the reconstruction of Mexico City and central Mexico will provide an economic boost to the country.