Mexico: Economic activity deteriorates in April
The monthly indicator for economic activity (IGAE) dropped 0.2% in month-on-month seasonally-adjusted terms in April, which contrasted March’s 2.7% increase and was a weaker reading than markets had expected. The notable downturn came on the back of drops in the industrial and primary sectors, and slower growth in the services sector.
On an annual basis, economic activity rose 22.3% in April, notably above March’s 0.8% expansion and marking the best result on record. However, the reading was flattered by the favorable base effect. Moreover, the trend improved sizably, with the annual average variation of economic activity coming in at minus 5.6%, up from March’s minus 8.6%.
Despite the soft April reading, the economy is still projected to pick up pace in Q2 as a whole, supported by a booming U.S. economy and the domestic vaccine rollout.