Economic Indicator Briefing - Mexico - Current Account Balance

In the third quarter, the current account balance recorded a deficit of US$ 5.0 billion. The figure represented a deterioration compared to the US$ 1.0 billion deficit recorded in the same quarter of last year and also exceeded the US$ 2.7 billion deficit observed in the second quarter (previously reported: US$ 2.0 billion deficit). The deterioration of the current account balance was primarily caused by a higher deficit in the trade balance. The trade balance deficit soared from US$ 767 million in the second quarter to US$ 6.1 billion in the third, as imports outpaced exports. Exports increased 12.1% annually, down from the 17.5% pace seen in the previous period, while imports accelerated from 14.7% annual growth in the second quarter to 16.8%.

In addition, the transfer balance surplus fell from US$ 6.4 billion in the second quarter to US$ 6.0 billion, as remittances from workers abroad continued to decline. Remittances dropped 6.5% over the same quarter last year, the fourth consecutive quarterly decline, as the sharp downturn in the United States continues to affect this increasingly important source of financing.

Finally, on a positive note, the income balance improved markedly, as the deficit narrowed from US$ 6.4 billion in the second quarter to US$ 2.5 billion. As a result of the third quarter reading, the moving annual current account deficit rose from US$ 7.8 billion in the second quarter to US$ 11.8 billion.

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