Mexico Economic Activity March 2018


Mexico: Economic activity growth contracts in March

May 23, 2018

Economic activity data for March closed the first quarter on a weak note, with the monthly proxy for GDP produced by the National Statistics Institute (INEGI) contracting 0.8% year-on-year, contrasting the revised 2.3% expansion registered in February (previously reported: +2.4% year-on-year). The print was the worst deterioration in nearly a year and came on the back of a contraction in the industrial sector and slowdowns in the agricultural and services sectors.

The industrial sector contracted 3.7% in annual terms in March, sizably down from February’s revised 0.6% expansion (previously reported: +0.7% yoy) and marking the sharpest downturn in eleven months. The contraction was broad-based across industries, including mining, manufacturing and construction. Meanwhile, growth in the primary sector moderated to 7.0% in March, down from February’s robust and upwardly-revised 9.4% print (previously reported: +8.3% yoy). Meanwhile, growth in tertiary-sector activity eased considerably to 0.4% (February: +2.9% yoy), the weakest expansion in nearly four years against a backdrop of weaker activity in wholesale trade, healthcare, education, and professional services.

On a month-on-month basis, economic activity growth eased to 0.3% in March, down from 0.7% in February.

Banxico expects the economy to grow between 2.0% and 3.0% in 2018 and between 2.2% and 3.2% in 2019. Panelists participating in the LatinFocus Consensus Forecast expect the economy to grow 2.2% in 2018, which is unchanged from last month’s forecast. GDP growth is projected to pick up slightly to 2.3% in 2019.


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