Mexico Economic Activity May 2017


Mexico: Economic activity rebounds in May

July 24, 2017

The monthly proxy GDP (IGAE) produced by INEGI swung from a revised 0.6% contraction in April (previously reported: -0.7% year-on-year) to a 3.1% expansion in May. May’s figure was above market expectations of a 2.6% expansion.

The main driver of growth was the services sector (May: +4.4% yoy; April: +1.4% yoy). The largest increase was recorded in the temporary accommodation and food and beverage preparation services subcomponent. The commerce subcomponent rebounded strongly. Concurrently, the secondary sector swung back into positive territory with a 1.0% increase after taking a hit in April with a 4.2% decline. The primary sector experienced its first contraction since May 2016 (May 2017: +0.3% yoy) following last month’s rise of 0.5%.

On a monthly basis, economic activity increased 0.2% in seasonally-adjusted terms in May, a slight acceleration from April’s 0.1% month-on-month increase.

The Central Bank expects GDP to grow between 1.5% and 2.5% in 2017 and between 1.7% and 2.7% in 2018. According to the latest survey of analysts for the LatinFocus Consensus Forecast, panelists see the economy increasing 2.0% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, the panel expects growth to pick up to 2.2%.

Author:, Economist

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