The Day at a Glance | September 25 2020

The Top

· The Mexican economy grew 5.7% in July (-9.8% annual), according to the Global Indicator of Economic Activity.

· Pelosi and Mnuchin will resume negotiations in a last attempt to approve a fiscal package in the US before the election.

· Economic indicators: Moderation in growth is expected to be seen regarding new orders of durable goods in the US (1.5% e. Aug., vs 11.4% prev.).

Economic environment

Economic activity in Mexico continued to recover during July – it grew 5.7% month over month according to INEGI figures. The data reflects an acceleration in the economy`s recovery during the seventh month of the year, even though leading indicators show weaker momentum in August. With this, the contraction at an annual rate reduced to (-) 9.8% with improvements in every sector. Primary activities grew 13.9% during the period (10.6% annual), while the industrial sector expanded 6.9% (-11.6%) and services grew 4.6% (-10% annual). The recovery`s future is still uncertain as risks are skewed downwards because of the virus and the lack of fiscal stimulus. To a large extent, Mexico`s recovery depends on US economic activity, which has started to show signs of a slowdown in September. Simultaneously, there is a lack of agreement among politicians to extend fiscal stimuli in the US, which increases the risk of seeing a more noticeable slowdown in the last quarter of 2020.