European Commission cuts growth estimates
The European Union`s executive organ revised its growth estimates downwards for the entire Euro block and expects a more aggressive contraction, as the lifting of mitigation measures has been slower than anticipated. The Commission forecasts a (-) 8.7% contraction in 2020 (vs -7.7% prev.) with a different performance among the Union`s members: For Italy, the Commission forecasts a contraction greater than it had first estimated (-11.2%; with similar situations expected to occur in France and Spain), while for Germany the setback will be less aggressive than previously expected (-6.3%). It`s estimated that in the 2Q20, the Union will contract (-) 13.6% as a result of the confinement measures and the virus. The organism has called for joint efforts to prevent greater inequality among its member countries. For 2022, it expects a slightly more moderate recovery in the economy (6.1% vs 6.3% prev.). The Commission has proposed a 750 billion euro package to boost recovery, which at the moment is yet to be approved. A summit of European leaders is scheduled to take place on July 17th and 18th.
Automobile production and exports recover in Mexico
Figures made public by the Mexican Automotive Industry Association (AMIA by its initials in Spanish) showed a strong recovery in production as well as exports in June – compared to May. Production in June increased to 238,946 units (vs 22,119) and exports reached 196,173 (vs 15,088); both dramatic rebounds that reflect the resumption of activities in the industry. However, production (-29.3% June) and exports (-38.8%) are still in contraction at an annual rate. Estimates made by the Association itself suggest a contraction in production this year between 28-30% and 30-33% regarding exports.