MEXICO CITY – Mexico’s economy shrank in the second quarter for the first time in three years, dragged down by a deep slump in industrial output, while the service sector activity stagnated, quarter-on-quarter data showed on Monday. The findings confirmed what many economists feared, reported last week.
Gross domestic product contracted by 0.2 percent from the prior quarter, according to seasonally-adjusted data from the National Statistics and Geography Institute (INEGI). Preliminary data in July showed a 0.3 percent slump and the economy grew a downwardly revised 0.5 percent in the first quarter.
The industrial sector, which includes manufacturing and crude production, contracted by 1.5 percent from the January-March period, its biggest drop since the first quarter of 2009.
Weak demand in the United States for Mexican-made goods has weighed on Latin America’s second biggest economy, while oil revenues have been hit by a slump in oil prices and production.
Mexico’s services sector posted 0.1 percent growth while agricultural output dipped 0.3 percent, the data showed.
Compared with the second quarter of 2015, GDP expanded 2.5 percent, following preliminary figures which showed a 2.4 percent expansion. Growth was 2.4 percent in the first quarter versus the year-ago period.