Mexico GDP Q2 2016


Preliminary data show economy's loss of momentum in Q2

Mexico’s GDP lost momentum in the second quarter, according to a preliminary estimate released by the National Statistics Institute (INEGI) on 29 July.

The flash estimate showed that the economy had increased 2.4% in Q2 over the same period last year, which fell short of the 2.5% rise the markets had expected and represented a deceleration over the 2.6% expansion observed in Q1. Sequential data adjusted for seasonal factors showed that economic performance had worsened: GDP decreased 0.3% in Q2 over the previous quarter, which contrasted the 0.8% increase registered in Q1 and marked the steepest quarterly contraction in three years.

According to INEGI, Q2’s economic slowdown was mainly the result of a deceleration in services. The tertiary sector slowed from a 3.7% year-on-year increase in Q1 to a 3.2% expansion in Q2. Conversely, both the agricultural and industrial sectors gained momentum in the second quarter, expanding 4.2% (Q1: +3.1% yoy) and 0.8% (Q1: +0.4% yoy), respectively. The release of more complete data will be published on 22 August.

The Central Bank (Banxico) expects the economy to grow between 2.0% and 3.0% this year. For 2017, the Bank expects GDP to grow between 2.5% and 3.3%. According to the latest survey of analysts for the LatinFocus Consensus Forecast, panelists see the economy increasing 2.4% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects growth to pick up to 2.7%.

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Mexico GDP Chart

Mexico GDP Q2 2016 0

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

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