Mexico entered a technical recession, according to BofA, and expectations for 2022 fall

The financial institution Bank of America took into account the latest data from the Global Indicator of Economic Activity, provided by the National Institute of Statistics and Geography (Inegi) and interpreted that the Mexican economy would add two consecutive quarters of declines compared to its previous quarters. Which would mean that Mexico is entering a technical recession.

The Global Indicator of Economic Activity, which is released month by month, is an index that analysts use to estimate the growth and/or decrease in the Quarterly Gross Domestic Product, which is released on a quarterly basis.

With this measurement, the economy suffered a 5.2% drop in the third quarter of 2021 and the BofA estimates a 1.9% contraction for the last quarter of the year, taking into account the Timely Indicator of Economic Activity (IOAE) for December, with seasonally adjusted figures, released by Inegi this week.

“Disconcerting” data for the last quarter of the year

The IOAE for December estimated a 0.2% year-over-year decline in global activity during December 2021.

This data was considered “puzzling” by some experts, such as the deputy governor of the Bank of Mexico, Jonathan Heath, who stated: “If the IOAE estimates for the last two months of the year are correct and there are no revisions in the previous months, we can expect a drop of -0.5% in the fourth quarter compared to the previous one”