Mexico Economic Activity


Mexico: Economic activity decelerates further in August

October 24, 2014

INEGI’s monthly economic activity indicator (IGAE) showed that economic activity increased 1.3% in August over the same month last year. The reading marked a notable deceleration over the 2.5% expansion observed in July and came in below the 2.3% rise the market had expected. Economic activity’s trend stabilized; annual average growth remained stable at July’s 1.5% in August.

August’s reading was the result of a slowdown in both the industrial sector and services. Industry increased 1.4% annually in August, which was down from the 2.0% expansion tallied in July. Annual growth in services fell from 2.5% in July to 1.0% in August, the slowest rate in nine months. Only growth in agriculture improved over the previous month (August: +7.6% year-on-year; July: +7.5% yoy).

A month-on-month comparison points to a worse deterioration than the slowdown suggested by the annual data. Economic activity slipped a seasonally-adjusted 0.17% in August, which contrasted the 0.33% increase registered in July.

The government expects the economy to grow 2.7% in 2014, while the Central Bank (Banxico) sees the economy growing between 2.3% and 3.3%. LatinFocus Consensus Forecast panelists’ projection is in line with the Bank’s assessment. They see the economy expanding 3.1% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects growth to pick up to 3.9%.

Author:, Senior Economist

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Mexico Economic Activity Chart

Mexico Economic Activity August 2014

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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