Mexico GDP Q1 2016


Revised GDP growth data confirms acceleration in Q1

More complete data confirmed that Mexico’s GDP growth accelerated at the beginning of the year. According to a second release made by the National Statistical Institute (INEGI), GDP increased 2.6% year-on-year in the first quarter, which was virtually unchanged from the 2.7% increase published in a preliminary estimate released by INEGI on 29 April. Q1’s result came in above a 2.4% increase in the fourth quarter and was in line with market expectations.

The revised data confirmed that agriculture and industry were the main drivers behind Q1’s acceleration. Agriculture increased 3.1% annually in Q1 (previously reported: +3.0% year-on-year), which swung from a 1.1% contraction in Q4. Meanwhile, growth in the industrial sector was revised down in Q1 from a preliminary 0.7% to 0.4%. Nonetheless, Q1’s expansion in industry still represented an acceleration over the 0.2% increase tallied in Q4. Growth in services continued to show robust growth and the reading was not revised: the sector maintained Q4’s healthy 3.7% growth rate in Q1.

Looking at seasonally-adjusted quarter-on-quarter data, Mexico’s GDP expanded 0.8% in Q1, which was a faster expansion over the 0.6% rise registered in the last quarter of 2015.

The Central Bank (Banxico) cut its growth forecast for 2016 and now sees the economy growing between 2.0% and 3.0% (previous estimate: 2.5% and 3.5%). For 2017, the Bank also revised Mexico’s growth prospects and expects GDP to grow between 2.5% and 3.5% (previous estimate: 3.0% and 4.0%). 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 2.8%.

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Mexico GDP Chart

Mexico GDP Q1 2016 0

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

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