Mexico: Economic activity accelerates in February
April 25, 2014
Economic activity increased 1.7% over the same month last year in February according to INEGI's monthly economic activity indicator (IGAE). The reading came in above the revised 1.0% expansion registered in January and overshot the 1.6% increase the markets had expected. This is the strongest expansion since July 2013.
February's result reflected a notable expansion in agriculture (February: +11.8% year-on-year; January: -0.7% yoy) as well as an improvement in industry (February: +1.9% yoy; January: +1.1% yoy). Conversely, growth in services weakened somewhat and expanded 0.7% in February, which was slightly below the 0.8% expansion observed in January.
A sequential comparison confirms the strengthening suggested by annual data. In February, economic activity increased a seasonally-adjusted 0.5% over the previous month, which came in above the 0.2% rise tallied in January. The trend improved slightly; annual average growth in economic activity rose from 1.0% in January to 1.1% in February, which ended the downward trajectory that had been in place since August 2012.
The Central Bank (Banxico) expects the economy to grow between 3.0% and 4.0% in 2014. For 2015, the Bank sees economic growth averaging between 3.2% and 4.2%. LatinFocus Consensus Forecast panelists' projection is in line with the Bank's assessment. They see the economy increasing 3.4% in 2014, which is unchanged from last month's forecast. For 2015, the panel expects growth to pick up to 3.9%.
Author: Ricardo Aceves, Senior Economist