Mexico’s finance ministry says talk of ‘technical recession’ imprecise

MEXICO CITY, Jan 28 (Reuters) – Mexican Deputy Finance Minister Gabriel Yorio said on Friday that talk of a “technical recession” in the country ignores the economic volatility linked to the coronavirus and the problems of global supply chain.

Mexico’s economy, the second largest in Latin America, likely shrank 0.2% in December from the same month a year earlier, according to a preliminary official estimate last week, sparking concerns that the country could having slipped into a recession in the second half of 2021. Read more

Meanwhile, a Reuters survey showed on Friday that Mexico’s economy likely contracted in the last three months of 2021. That would mark a second consecutive quarter of negative growth, which constitutes a technical recession. Read more

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“We feel like talking about a technical recession doesn’t quite capture the economic dynamics we’re seeing due to the effects of the pandemic and especially due to the supply shocks the world is facing,” said Yorio at a press conference.

Global supply bottlenecks, rising commodity prices and rising land and sea transport costs are weighing on the economy, Yorio added.

Some analysts have said that Mexico’s economic stagnation and high inflation are a recipe for stagflation.

“There’s been a lot of talk about stagflation, but we don’t agree that we’re in this situation,” Yorio said.

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Reporting by Anthony Esposito and Noe Torres, Writing by Kylie Madry Editing by Paul Simao

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