It all depends on the glass you look at.
This is a phrase that serves at this time to determine where the Mexican economy is and if it is really heading towards a sustained recovery after having experienced its worst debacle in almost 90 years.
In the following months, it will be common to see rises of up to two digits in the main macroeconomic indicators and that, in the first instance, will create the perception that the Mexican economy is already recovered and growing.
As examples: compared to the same period last year and what was the reason for this strong increase? Because in April and May 2020, the productive sectors stopped almost entirely due to fears of the spread of COVID infections.
“A very interesting indicator was the industrial activity for the month of April, and here we had a year-on-year growth of 37% due to this low comparative base. It is not that this variation is not real, but it is a bit exaggerated because we are comparing it with the most difficult point of the crisis ”, said Alejandro Saldaña, chief economist of Grupo Financiero Ve por Más (Bx +).
“You have to take it with caution. These extraordinary growth figures that are going to be presented are precisely because last year we came from an unprecedented decline in the history of the economy and how a gradual recovery has been taking place, since any growth that occurs is going to be very attractive, ”explained Héctor Magaña, coordinator of analysis and research at the Center for Research in Economics and Business (CIEN) at Tecnológico de Monterrey.
And just as there was this strong rebound for industrial activity and the IGAE, it is expected that the results of GDP, employment, industrial production and consumption, mainly, will have a similar behavior in the following months.
What is the best comparison?
Both specialists highlighted the qualities of the different comparisons for macroeconomic indicators, since they allow a broader picture of where the country is and what the trend would be for the short and medium terms.
A comparison with the same immediately previous period allows a visibility of how the indicator is behaving in the short term, explained the professor from Tecnológico de Monterrey.
However, you have to be careful at this point, since it is not the same to compare March against February of the same year because in the third month, usually, the Easter holidays are celebrated and that generates changes both on the side of spending as in the production of goods and services.
The chief economist of Bx + said that for this type of comparisons, the seasonally adjusted figures should be reviewed, which are those that eliminate those special cases and that Inegi himself presents in his reports.
In the year-to-year period , this factor is not presented and therefore the comparison is easier. This vision, according to the interviewees, serves to see the behavior of the variables but in a longer term.
A more reasonable comparison could be against the 2019 data to see more or less how the economy has evolved and see when all the ground that was lost during that year could be recovered.
“Personally, I try to see the different comparisons and I do not give a weighting that any are less effective, they will simply help us reach a more robust conclusion,” said Alejandro Saldaña, from Bx +.
When will there be sustained growth?
Héctor Magaña, who is a professor at Tecnológico de Monterrey, warned that despite the positive figures for the remainder of the year, these will be insufficient to recover all that was lost during the crisis: “If the trend continues, we will have figures similar to those we had prior to the pandemic until the end of 2024 ”.
The key point is both national and foreign investment because as the country becomes more attractive or generates a greater opportunity for investors, it will translate into future sources of employment, he added.
“(There should be) more certainty and that an economic policy is implemented that generates credibility and trust, in which support is given to companies and people who have been most affected by this pandemic so that they can increase their level of spending. Preventing more businesses and jobs from being lost permanently, this would also help us have a more robust economic recovery ”, assured Alejandro Saldaña, chief economist at Bx +.
