Mexico Economic Activity February 2016

Mexico

Mexico: Economic activity accelerates in February

April 26, 2016

Mexico’s economic activity, measured by INEGI’s monthly economic activity indicator (EGAE), surged 4.1% year-on-year in February, which marked a notable acceleration over the 2.2% expansion registered in January. The reading also overshot the 3.0% increase the markets had expected. According to INEGI, the monthly acceleration was mainly the result of faster growth in manufacturing and services. The goods-producing sector expanded at the fastest pace in 14 months and growth in Mexico’s services providers was the fastest in nearly three years. That said, the agricultural sector lost momentum in February.

A month-on-month comparison showed that economic activity expanded a seasonally-adjusted 0.2% in February, which came in below the 0.6% rise seen in January. The increase in January had registered the fastest pace since August 2015.

The trend continued to suggest that growth in economic activity remains stable, albeit solid. Annual average growth in economic activity inched up from 2.5% in January to 2.6% in February.

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 now 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 2.5% in 2016, which is down 0.2 percentage points from last month’s forecast. For 2017, the panel expects growth to pick up to 2.9%.


Author:, Senior Economist

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Mexico Economic Activity Chart


Mexico Economic Activity February 2016 0

Note: Year-on-year changes and annual average growth rate of monthly economic activity in %.
Source: Mexico National Statistics Institute (INEGI)


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