Mexico Economic Activity February 2018


Mexico: Economic activity growth picks up in February

April 23, 2018

Economic activity data for February suggests that the economy gained traction in Q1 2018, with the monthly proxy for GDP produced by the National Statistics Institute (INEGI) expanding 2.4% on an annual basis in February. The print was an acceleration from January’s 2.1% expansion and marked the fastest rise since August 2017. A pick-up in the headline figure was largely driven by a robust turnaround in the primary sector and a solid performance in the services sector. Meanwhile, growth in the industrial sector moderated slightly in February.

The primary sector rebounded and grew 8.3% in annual terms in February, contrasting January’s revised 0.8% contraction (previously reported: -0.7% year-on-year). The tertiary sector grew 2.9% in February, matching January’s print. Healthy growth in services was driven by stronger activity in wholesale trade, financial services, healthcare and education, and professional services. This was partially offset by moderations in retail trade and transport services activity. Conversely, growth in the secondary sector moderated to 0.7% in February from a revised 0.8% expansion in January (previously reported: +0.9 yoy). The easing was a result of a contraction in mining output and softer activity in manufacturing.

Month-on-month data confirms the acceleration in economic growth, with activity up 0.7% in sequential terms in February, following a contraction in January.

The Central Bank (Banxico) expects the economy to grow between 2.0% and 3.0% in 2018 and between 2.2% and 3.2% in 2019. Our panel expects the economy to grow 2.2% in 2018, which is unchanged from last month’s forecast. Looking further ahead, GDP growth is projected to pick up to 2.3% in 2019.


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