Mexico’s finance ministry says talk of ‘technical recession’ imprecise

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FILE PHOTO: Mexican Deputy Finance Minister Gabriel Yorio is seen during an interview with Reuters at the National Palace in Mexico City

By Anthony Esposito and Noe Torres

MEXICO CITY – Mexico’s Deputy Finance Minister Gabriel Yorio said on Friday that talk of a “technical recession” in the country doesn’t take into account coronavirus-related economic volatility and global supply chain issues.

Mexico’s economy, the second-largest in Latin America, likely shrank 0.2% in December compared with the same month a year earlier, a preliminary official estimate showed last week, stirring concerns the country may have slipped into a recession in the second half of 2021.

Meanwhile, a Reuters survey showed on Friday that Mexico’s economy likely contracted in the last three months of 2021. That would mark a second straight quarter of negative growth, which constitutes a technical recession.

“We feel like talk of a technical recession doesn’t really capture the economic dynamics we’re seeing due to the effects of the pandemic and above all else because of the supply shocks the world is facing,” Yorio said in a news conference.

Global supply bottlenecks, increased prices for raw materials, and higher costs for ground transportation and sea shipping are weighing on the economy, Yorio added.

Some analysts have said the economic stagnation and high inflation that Mexico was experiencing was a recipe for stagflation

“There has been a lot of talk about stagflation, but we don’t agree that we’re in that situation,” Yorio said.

(Reporting by Anthony Esposito and Noe Torres, Writing by Kylie Madry; Editing by Paul Simao)