The Day at a Glance | November 25 2021

The Top

*A (-) 0.4% contraction in Mexico´s economy during the 3Q21 was confirmed (4.7% annual); a greater than expected contraction.

*Victoria Rodríguez´s nomination for the Central Bank of Mexico is questioned among markets; lack of experience and less independence have triggered uncertainty.

*Consumption in the United States doesn’t show any signs of weakness: Consumer spending increased 1.3% in October, its highest level since March.

*Confidence in Germany´s economy recedes as the virus´s new wave affects the country´s recovery (Ifo 96.5).

*Chinese authorities ask local governments to issue more debt and increase investment in construction to counter the economic slowdown.

*COFECE considers that the decree to consider public works in Mexico a matter of national security could affect competition.

*COVID-19 cases increase in the United States; there are fears that festivities will further increase the number of cases.

*FED is open to moving monetary normalization forward if needed, even though it continues to expect inflation to be transitory, according to the central bank´s meeting minutes.

Economic environment

Growth during the 3Q21 was revised downwards in Mexico. According to figures made public by the INEGI this morning, Mexico´s economy receded (-) 0.4% in the 3Q21, a greater than expected contraction forecasted by leading figures (-0.2% prev.). According to the figures, September logged a similar contraction in economic activity (-0.4% monthly, +1.3% annual), with setbacks in all of the economy´s sectors (-1.4% primary and secondary activities; -0.3% tertiary), which led to a decline during the quarter. During the period, services decreased 0.9%, while industrial activities receded (0.3%) and primary activities (1.3%) increased moderately. Annually, the economy´s growth slowed down to 4.7% in the third quarter of the year; while growth during the January-September period set at 6.4% compared to the same period of 2020. A faster pace of recovery is expected in the 4Q21 as challenges triggered by the virus during the previous quarter dissipate and exports recover during the last part of 2021.