Stimulus Check – UPDATE 1-Mexican economy extends contraction in March but rebound likely
(Recasts with expectation of economic rebound, boost from U.S. stimulus)
MEXICO CITY, April 19 (Reuters) – Mexico’s economy extended its losing streak in March, shrinking by more than 2%, while analysts expect a rebound in subsequent months as the pandemic subsides and the spillover effects of economic stimulus in top trade partner the United States.
The Mexican economy contracted by 2.1% in March compared to the same month last year, preliminary data from national statistics agency INEGI showed on Monday, deepening Mexico’s economic woes.
Latin America’s second largest economy was already in a slight recession in 2019 and then contracted by 8.5% in 2020, its deepest dive in almost 90 years, because of the coronavirus pandemic. However, the economy recovered quicker than first estimated in the final quarter of 2020.
Secondary activities, which include manufacturing, were down 0.9% for the month while tertiary activities such as services slid 3.1%, according to the INEGI estimate.
A return to modest economic growth is forecast later this year for Mexico’s economy as the United States begins to implement a nearly $2 trillion economic stimulus package enacted by President Joe Biden and his congressional allies. (Reporting by David Alire Garcia; Editing by Frank Jack Daniel and Grant McCool)