Mexico's gross fixed investment rises 11.1% in the first half of the year
In the first half of 2021, Mexico's gross fixed investment registered a rebound of 11.1% compared to the same period of the previous year, which was severely impacted by the coronavirus pandemic.
Mexico's gross fixed investment recorded a rebound of 11.1% in the first half of 2021 compared to the same period last year, which was severely impacted by the coronavirus pandemic, according to data released Monday by the National Institute of Statistics and Geography (Inegi).
Inegi announced that this result was obtained due to an 18.4% increase in machinery and equipment, and a 6.2% year-on-year increase in construction. In the sixth month of the year, gross fixed investment grew 17.1% year-over-year thanks to a 24.5% increase in machinery and equipment and an 11.5% increase in construction.
According to seasonally adjusted data, investment fell 1.8% last June versus the previous month due to a 2.9% drop in construction and a 0.4% drop in machinery and equipment. "Affected by its two components, gross fixed investment registered its second decline in 3 months: it decreased 1.8% month-over-month in June 2021," stated Julio A. Santaella, president of Inegi, on Twitter.
Santaella also explained that, due to this monthly result, the recovery of gross fixed investment "seems to have stalled" in the second quarter. April 2020 was the first full month in which the coronavirus pandemic hit the country hard -which today totals more than 3.4 million cases and almost 264 thousand deaths- leading to the closure of non-essential productive activities and social distancing.
Mexican gross fixed investment fell by 18.2% year-on-year in 2020 dragged down by the Covid-19 crisis. In 2019, this investment contracted 4.9%, while it grew 0.6% in 2018 and declined 1.5% in 2017. Gross fixed investment allows to have "a broad knowledge" about the behavior of investment in the short term, according to Inegi.
It is comprised of goods used in the productive process for more than one year and which are subject to property rights. The Mexican economy contracted 8.2% in 2020, its worst slump since the Great Depression of 1932, according to Inegi data. Mexico's Gross Domestic Product (GDP) contracted 0.1% in 2019 due to a drop in industrial activity, a substantial decline from the previous year's 2.1% growth.
