Mexico: Preliminary data show economy's loss of momentum in Q2
July 29, 2016
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.
Author: Ricardo Aceves, Senior Economist