Mexico: Economic activity growth beats market expectations
October 28, 2010
In August, economic activity increased 7.3% over the same month last year, according to the monthly indicator for economic activity (IGAE, Indicador Global de la Actividad Economica). The reading exceeded market expectations of a 6.5% increase and also marked the fastest pace in three months. The strong annual reading continues pointing towards a sustained economic recovery. Moreover, a month-on-month comparison corroborates this notion, as economic activity expanded 0.58% over the previous month in seasonally adjusted terms, which was virtually unchanged over July's 0.63% increase. The improvement over the previous month was led by the industrial sector, which accelerated from a 5.2% year-on-year increase in July to an 8.1% expansion. Services also improved, albeit less markedly, and recorded a 6.4% expansion (July: +4.4% yoy). In contrast, the agricultural sector decelerated to a 5.3% increase, down from the 8.4% expansion recorded in July. As a result of the strong monthly reading, annual average growth in economic activity jumped from 1.6% in July to 2.9% in August. Currently, the Central Bank anticipates the economy to grow 5.0% this year and between 3.2% and 4.2% in 2011.