Mexico: Economic activity decelerates in January
March 25, 2014
Economic activity increased 0.8% over the same month last year in January according to INEGI's IGAE (Indicador Global de la Actividad Economica). The reading came in below the 1.4% increase the market had expected and marked a deceleration over the 1.1% expansion registered in December. January's result primarily reflected a deterioration in agriculture (January: -1.7% year-on-year; December: +1.2% yoy) and a deceleration in services (January: +1.0% yoy; December: +1.9% yoy). Conversely, industry increased 0.7% annually in January (December: -0.3% yoy), which marked the fastest pace of expansion in nine months. A month-on-month comparison, however, does not corroborate the deceleration suggested by the annual data. In January, economic activity expanded a seasonally-adjusted 0.1%. The reading contrasted the 0.3% contraction registered in December. The trend, nonetheless, still points downward. Annual average growth in economic activity fell from 1.1% in December to 0.9% in January, which marked the slowest pace in more than three years. The Central Bank (Banxico) expects the economy to grow between 3.0% and 4.0% in 2014. 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