Mexico GDP Q3 2016

Mexico

Mexico: Economy expands at slowest pace in over two years in Q3

Mexico’s GDP lost momentum in the third quarter, according to a preliminary estimate released by the National Statistics Institute (INEGI) on 31 October.

The flash estimate showed that the economy increased 2.0% in Q3 over the same period last year, which was in line with market expectations and represented a deceleration from the 2.5% expansion observed in Q2 and the slowest growth rate since Q2 2014. That said, sequential data adjusted for seasonal factors showed that the economic performance had improved substantially: GDP jumped 1.0% in Q3 over the previous quarter, which contrasted the 0.2% decrease registered in Q2 and marked the fastest quarterly expansion in more than two years.

According to INEGI, Q3’s economic slowdown was mainly the result of a deterioration in industry. Growth in the secondary sector swung from a 1.0% year-on-year increase in Q2 to a 1.0% contraction in Q3. Conversely, both the agricultural and services sectors gained momentum in the third quarter, expanding 4.9% (Q2: +3.8% yoy) and 3.3% (Q2: +3.2% yoy), respectively. More complete data will be released on 23 November

The Central Bank (Banxico) expects the economy to grow between 1.7% and 2.5% this year. For 2017, the Bank expects GDP to grow between 2.0% and 3.0%. According to the latest survey of analysts for the LatinFocus Consensus Forecast, panelists see the economy increasing 2.1% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects growth to pick up to 2.4%, which is unchanged from last month’s forecast.


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Mexico GDP Q3 2016

Note: Year-on-year changes of GDP in %.
Source: Mexico National Statistics Institute (INEGI)


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