Mexico Economic Activity September 2016


Mexico: Economic activity moderates in September

September 26, 2016

September’s monthly proxy GDP (IGAE) produced by INEGI decelerated from a 3.0% year-on-year increase in August to a 1.6% expansion in September. Nonetheless, the moderation was less disappointing than the 1.4% rise the markets had expected. The expansion was supported by a 3.2% annual expansion in services and by a 4.6% rise in agriculture, which were dragged down by a sudden contraction in the industrial sector.

Sequential data showed that economic activity expanded 0.5% from the previous month in seasonally-adjusted terms, which came in above the flat growth rate observed in August.

All in all, September’s result suggests that GDP ended Q3 on a weak footing and that the overall trend in economic activity is starting to moderate. Annual average growth in economic activity fell from 2.4% in August to 2.2% in September.

In its most recent Inflation Report, the Central Bank (Banxico) trimmed its growth forecasts and now expects the economy to grow between 1.8% and 2.3% (previous estimate: 1.7% and 2.5%). For 2017, the Bank expects GDP to grow between 1.7% and 2.5% (previous estimate: 2.0% and 3.0%). According to the latest survey of analysts for the LatinFocus Consensus Forecast, panelists see the economy increasing 2.1% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects growth to pick up to 2.3%, which is down 0.1 percentage points from last month’s estimate.

Author:, Senior Economist

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Mexico Economic Activity Chart

Mexico Economic Activity September 2016

Note: Year-on-year changes and annual average growth rate of monthly economic activity in %.
Source: Mexico National Statistics Institute (INEGI)

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