MEXICO CITY (AP) — Mexico’s economy entered a recession in 2019, according to preliminary fourth quarter data released by the country’s statistics institute.
While Mexico had forecast that its economy would grow 2% during the first year of President Andrés Manuel López Obrador’s administration, it instead grew 0.1% in the first half of the year and remained stagnant in the second.
A report by Alfredo Coutiño of Moody’s Analytics Thursday noted that it was the first annual contraction since the 2009 recession. He said the economy had three consecutive quarters of negative annualized seasonally adjusted rates from the fourth quarter of 2018 until the second quarter of 2019, meeting the technical definition of recession.
The government transition played a role by creating a delay in the federal budget, but the administration contributed to the contraction by cancelling major infrastructure projects and interrupting contracts in the energy sector, Coutiño said.
“The lack of policy definition and economic direction of the new government, together with the damage to investor sentiment resulted in a steady deterioration of confidence and credibility and further reticence of private investment,” the Moody’s report said. “Unfortunately the 2019 economic contraction was more the result of the uncertainty introduced by the government’s actions and less of external factors.”
López Obrador has maintained that the economy is strong and railed against outside critics of his policies.