The economy shows signs of weak recovery: Inegi

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Signs of the performance of the Mexican economy at the beginning of the second quarter of the year were weak, according to the results of the system of economic indicators developed by Inegi.

This system is composed of two elements: The coincident indicator reflects the general state of the economy; while in advance tries to indicate in advance the change points of the indicator coincide, based on the information with which its components are available at a given date.

After five consecutive months of rising, the coincident indicator recorded a retracement of 0.01 point in April compared with the previous month to establish at 99.9 units, remaining below its long-term trend (100 points), where it has been since last July.

the leading indicator was placed in May 2018 above its long-term trend by observing a value of 100.1 points, but it recorded a decrease of 0.12 point compared to April last, with which he accumulated four consecutive months of decline.

With the new information, the coincident indicator has altered the upward trajectory that it has observed in recent months, while the leading indicator has shown a decrease

Both indicators report similar trends, so that signs of a recovery at the beginning of the second quarter remained low

According to the most recent data from the global activity indicator . Economic (a kind of monthly GDP), the Mexican economy recorded last month a monthly growth of 1.4%, the lowest rate since January this year.

Of the six components that make up the indicator coincide, three reported a setback in April compared to March. These components include industrial activity, the overall indicator of economic activity and the number of permanent workers insured by the IMSS.

Conversely, the components of the coincident indicator that reported an improvement in April were the urban unemployment rate, the income index for the supply of goods and retail services, as well as the amount of total imports.

In the case of the leading indicator, five of the six components recorded declines in May, among which the evolution of manufactures, the indicator of business confidence in the manufacturing sector, especially whether it is the right time to invest, the price index and the listing of the Mexican stock market in real terms, the interbank interest rate of equilibrium, as well that the stock index Standard & Poor's 500. The only indicator that has had a positive behavior is the bilateral real exchange rate between Mexico and the United States.

In addition, according to the latest projections from private sector specialists, growth in the second quarter of the year is estimated at 2.6%, higher than the 2.3% achieved in the first quarter year, but below the 3% recorded the previous year, based on seasonally adjusted figures

Among the key factors that analysts believe could affect Mexico's economic performance are internal political uncertainty (19% of responses), foreign trade policy (17%), public insecurity problems (14%), lack of rule of law ( 8%) and impunity (5%)

In view of the foregoing, to the extent that uncertainty about the direction that will take the new government of Mexico and the situation of the renegotiation of the North American Free Trade Agreement (NAFTA), two of the main burdens, i It is likely that forecasts of the economy's performance tend to improve in the second half of the year.