Economic Indicators and Forecasting, Free Content, Mexico

Forget about april

https://www.banxico.org.mx/publications-and-press/quarterly-reports/%7BC1899452-8FC5-E0BB-F305-68766D01D861%7D.pdf

The trade balance for April was published yesterday. It is the first data that allows us a broad vision of the economy during the first month of confinement. We have already discussed various approaches with you, but now we have confirmation. The fall in exports was -41 percent (non-oil, -39 percent). Both figures are record, since the trade balance is measured monthly (1980). Imports fell -30 percent (non-oil, -28 percent). These are not records, as we will see.

On the foreign sales side, the most spectacular drop is in car exports, which fell almost -80 percent. Instead of 10 billion dollars, we sold 2,000, in closed figures. In oil exports, April reported the lowest figure since July 1999.

In imports, which are a clearer reflection of the behavior of the economy, the falls are also historical. They are not a record, as I was saying, because in previous crises we had a significant contraction in foreign purchases. In total imports, the falls were higher than the current one from May 1982 to July 1983, in almost every month, and the same happened during the first half of 2009.

The coup of 1982-83, which in the opinion of this column is the most serious economic crisis suffered by Mexico, and showed without a doubt how wrong that economic path, which we are walking again today, is seen in all imports: from consumption, intermediate or capital, and have contractions of -60, -70, -80 percent from April 1982 to the end of 1983. Other than that, it does not find one like the current falls, except very occasionally. Consumer imports fell in one month of 1986, and in six months of 1995 more than today. Intermediate goods did not suffer that and only fell in the first half of 2009.

But imports of capital goods, which are a fundamental part of investment, plummeted for 19 months between 1982 and 1983, with falls of up to -80 percent, as I was saying. They fell again one month in 1986 and four in 1987. They contracted for 10 months in 1995, and for three months in 2009.

More interesting still, although the fall in imports of capital goods in April 2020 was almost -27 percent, it does not differ much from the previous behavior: in March it fell -18 percent, and the average since November 2018 ( remember, NAIM) was -8.4 percent. In contrast, imports of consumer goods contracted -2.6 percent monthly average since November, in March they fell -6.7 percent, and in April they sank -30.5 percent. In line with a drop in double-digit consumption, as we expect for April. Imports of intermediate goods, inputs for manufacturing, almost fell: -0.3 percent monthly average, but in March they already suffered the blow, -11.5 percent. In April, -46.5 percent.

In sum, April was a month with a very serious contraction in economic activity. Much stronger than the loss of jobs, half a million, suggests. And I very much doubt that May is different. We are in the last week of the month, and there is no significant change in the variables that we have used as indicators.

Electricity consumption, according to Cenace, fell -7 percent in April, but reached -12 percent in the first 12 days of May. Regarding fuels, Santiago Arroyo informs us that the drop is -65 percent for April and -60 percent for the first two weeks of May. In consumption, BBVA registered a drop of close to -23 percent for both April and the beginning of May, a figure that coincides with that reported for ANTAD, equal stores, in the month of April.

This column maintains its estimate of -18 percent for the second quarter and -11 percent for the full year. I mean GDP, the happiness I don’t know how it changes.

https://www.elfinanciero.com.mx/opinion/macario-schettino/olvidate-de-abril