Collapse confirmed regarding consumption and investment in Mexico during April
INEGI figures published this morning confirmed a strong contraction in investment and consumption in the economy in April, moment during which social distancing measures were carried out nationwide. Consumption fell at a (-) 22.3% annual rate (-19.7% month over month), with a strong contraction in consumption of imported goods (-30.6% annual) and a more moderate setback in domestic goods and services (-21.2% annual). Investment, for its part, contracted (-) 37.1% annually (-28.9% monthly), after strong contractions in machinery and equipment expenses (-38% annual, -25.1% monthly) and construction (-363.3% annual, -30.9% monthly). Both indicators contracted more than estimated and confirmed what was observed in the trade balance`s weak figures. These figures promise downwards revisions concerning growth, especially if May does not record an immediate rebound because of the continued containment measures in the country. The contraction in investment is no news, as it links 15 consecutive months of negative annual rates, even though the health emergency has substantially accelerated the setback. Consumption linked 4 consecutive months of negative performance and it seems that 2Q20 will log record contraction figures.