Economic Indicator Briefing - Mexico - Gross Domestic Product

In the third quarter, gross domestic product (GDP) increased 1.6% over the same period last year. The reading was below the 2.7% expansion recorded in the second quarter (previously reported: +2.8% year-on-year) but came in slightly ahead of last month's Consensus Forecast, which had anticipated the economy would expand an even weaker 1.3%. Nevertheless, the reading marks the slowest pace in five years. At the sector level, the deceleration over the previous quarter was broad-based, as all three main economic sectors slowed over the preceding period. That said, a sharp slowdown in the industrial sector was the main driver behind the quarterly deceleration. Industrial output contracted 1.3% annually, which contrasted the 1.3% expansion recorded in the second quarter. Industrial activity was dragged down by negative growth in manufacturing (-0.2% yoy) as well as in mining (-6.4% yoy). In addition, the services sector, which accounts for almost two thirds of the total economy, decelerated from 3.3% annual growth in the second quarter to 2.8% in the third. Finally, the agricultural sector increased 4.9% over the same quarter last year (Q2: +5.6% yoy).

A quarter-on-quarter comparison, however, does not corroborate the deceleration suggested by the annual figures. According to seasonally adjusted data, the economy expanded 0.63% over the previous quarter, which was up from the 0.21% expansion recorded in the second quarter.

Forecasts: This indicator is covered in the FocusEconomics Consensus Forecast. For 5-year projections, including quarterly forecasts for the next two years, please visit our Online Store.