Mexico: Economic activity rises at slowest pace in more than three years
April 25, 2013
In February, economic activity rose a mere 0.4% over the same month last year, according to the IGAE (Indicador Global de la Actividad Economica). The subdued figure represents the slowest pace of expansion since November 2009, and is well below the revised 3.4% increase recorded in January (previously reported: +3.2% year-on-year). In addition, the reading undershot market expectations of a 0.8% increase.
The slowdown was broad-based, as all three major categories - agriculture, industry and services - fared worse compared to January. That said, the decline was led by the industrial sector, which swung from a 1.7% expansion in January to a 1.2% contraction in February. In addition, growth in the services sector dropped to a weak 1.1% (January: +3.8 yoy).
A month-on-month comparison corroborates the deceleration suggested by the annual data, as economic activity rose a seasonally adjusted 0.19% in February, which was below the 0.29% increase seen in the preceding month. Building on the subdued annual reading, the trend continues to point downwards, with annual average growth in economic activity falling from 3.9% in January to 3.4%.
In its latest inflation report from February, the Central Bank projects the economy to grow between 3.0% and 4.0% this year and between 3.2% and 4.2% in 2014. LatinFocus panellists share the Bank's assessment and see the economy growing 3.5% this year, which is unchanged from last month's forecast. For next year, the panel expects growth to pick up to 3.9%.