Mexico`s growth is revised slightly upwards
Final figures for Mexico`s 1Q20 Gross Domestic Product were revised slightly upwards, even though they confirmed the fourth quarterly contraction in the economy. GDP fell 1.4% quarter over quarter (vs -1.6% prev.) and (-) 2.2% annual. The greatest contraction was recorded in secondary activities (-2.9% quarterly, -3.5% annual), particularly in construction (-8.2% quarterly) and in the manufacturing industry (-2.9%). Tertiary activities also contracted (-0.7% quarterly, 1.2% annual), especially in entertainment services (-14.1% quarterly) and lodging (-7.9%), which were the hardest hit due to social distancing measures. The virus`s deepest impact is still expected to be seen in 2Q20. Import and export figures in April confirm this, as Mexican exports recorded one of its largest monthly setbacks in history (40.9% annual), with strong contractions in automotive exports (-79.1%), textiles (-48%), electrical and electronic appliances (-25.5%) and in industrial machinery (-21.6%), all sectors strongly associated to economic activity in the US. Imports also fell considerably, a sign that is far from encouraging regarding consumption and investment for the first month of 2Q20. The import of intermediate goods fell (-) 26.3% and consumer goods dropped (-) 37.9%. With this, the trade balance recorded a 3,087 million dollar deficit, the highest negative balance since February 2019.
OPEC+ will analyze the market before making new decisions
According to a statement published in Moscow, Russia, member countries of the Organization of Petroleum Exporting Countries and its allies (OPEC+), will review the situation in the global oil market before making new decisions with respect to the continuity of aggressive cuts in production. Kremlin spokesperson Dimitry Peskov assured that the measures adopted up to now have been effective and helped avoid worse scenarios. Considering what has been observed so far in May alone, WTI prices have recovered 75.82% because of the recovery in Chinese demand and the gradual reopening of the European and US economies. Next month OPEC+ will need to meet to decide on production policies.