The Day at a Glance | July 30 2021

The Top

*Mexico`s economy showed recovery in the 2Q21 (19.6% annual; 1.5% quarterly).

*Europe grew more than expected in the 2Q21 (13.7% vs 13.2%e.).

*Inflation in the Eurozone continues to accelerate; it recorded a 2.2% annual rate of growth in July (vs 2% e.).

*Inflation (PCE) in the US set in line with estimates and increased 4% annually in July.

*COVID19: New cases in Mexico reached their highest levels since January; restrictions increased in Asia due to the Delta variant`s spread; deaths at a global level accelerate.

Economic environment

Mexico`s economy logged a firm recovery during the second quarter of the year. According to timely estimates published by the INEGI, the economy expanded 19.6% at an annual rate, practically in line with estimates. The figures show a firm level of economic revitalization after the severe impact the pandemic had on the same quarter of the previous year. Growth was boosted by foreign demand, particularly exports to the United States, which allowed the industrial sector to record a 28.2% annual rate of expansion. Services recovered 17%, while primary activities increased 6.8%. Quarter over quarter, growth was slightly less than expected as it recorded a 1.5% expansion (vs 1.7% e.). The recovery is occurring at a faster pace in the internal market, with the tertiary sector leading growth (2.1% quarterly) as the economic reopening is complete, followed by primary (0.6%) and secondary (0.4%) activities. This is the first quarter that logs growth after 8 consecutive quarters of contraction in Mexico`s economy. Through the first semester of the year, the economy is expanding at an annual rate of 7.4%.