April 30, 2020 / 11:32 AM / a month ago

UPDATE 2-Hit to Mexican GDP slightly milder than expected in first quarter

(Updates with details)

MEXICO CITY, April 30 (Reuters) - Mexican gross domestic product (GDP) shrank 1.6 percent in the first quarter from the previous three-month period as the coronavirus outbreak began hitting activity in Latin America’s no. 2 economy, preliminary data showed on Thursday.

The seasonally adjusted estimate from the national statistics agency was slightly better than the consensus forecast of a Reuters poll of economists on Monday, which predicted an economic contraction of 1.7%.

Predictions made after the poll’s publication pointed to an even sharper contraction in GDP.

A breakdown of the data showed that primary activities such as farming, fishing and mining even grew by 0.5% on the quarter.

Secondary activities, which include manufacturing, and tertiary activities, which cover the service sector, both declined by 1.4% from the fourth quarter, the figures showed.

Mexico did not begin to impose major curbs on the economy until the second half of March so the main impact of the coronavirus outbreak is not expected to be fully reflected in official data until the second quarter.

Still, auto sales fell by a quarter last month.

Analysts are forecasting that the Mexican economy, which had already entered a mild recession in 2019, could shrink by anything up to around 10% this year.

The statistics agency is due to publish a final estimate for the economy’s first quarter performance on May 26.

If confirmed, the quarterly contraction would be the sharpest since the first quarter of 2009, when the economy shrank by 5.1% during the global financial crisis.

In unadjusted terms, the economy also shrank by 1.6% compared with the same quarter a year earlier, the data showed. (Reporting by Dave Graham Editing by Gareth Jones)

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