News

Mexico Economy Contracts

Elliott Wave International's publications have been warning subscribers to prepare for deflation and a global economic contraction.

For example, the September 2018 Eliott Wave Financial Forecast said:

It is still early in the current transition to a global economic contraction...

And, in this early stage, here's a brief review of Mexico's economic health from a May 24 Wall Street Journal article:

The Mexican economy contracted in the first quarter from the end of last year, a challenge for the six-month-old government of President Andrés Manuel López Obrador, who is aiming for growth to average 4% during his six-year term.

Gross domestic product, a measure of output in goods and services, fell 0.2% in seasonally adjusted terms from the fourth quarter of 2018, the National Statistics Institute said Friday. The result was unchanged from the institute's preliminary reading at the end of April.

Industrial output fell 0.6%, while services contracted 0.2% and agricultural production rose 2.6% from the previous quarter.

The statistics institute also revised down growth for the fourth quarter of 2018 to practically flat from 0.2%.

Compared with the first quarter of 2018, GDP expanded 1.2%, helped by additional working days in March as the Easter holiday shifted this year to April from March in 2018. The increase from a year before was reduced from 1.3%.

The first quarter "should mark the trough for the economy," Capital Economics chief emerging markets economist William Jackson said in a note. "Slow growth increases the likelihood that the Bank of Mexico will bring interest rate cuts onto the table at the next few meetings."

The central bank's overnight interest rate target is currently at a 10-year high 8.25%.

You are encouraged to read the free report, "What You Need to Know Now About Protecting Yourself from Deflation."

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