Mexico: Economic activity slows in January
March 25, 2015
The monthly economic activity indicator (IGAE) elaborated by INEGI rose 2.0% in January over the same month last year. The reading represented a deceleration over the 3.2% increase observed in December but slightly overshot the 1.8% increase the markets had expected. Following a stabilization in December, the trend in economic activity improved slightly in January. Annual average growth in economic activity inched up from 2.1% in December to 2.2%.
The slowdown observed in January was solely the result of a disappointing growth in the industrial sector. Industry increased a mere 0.3% year-on-year in January, which came in well below the 3.0% expansion registered in December. In fact, the slowdown exceeded the 2.1% rise the markets had expected. In addition, growth in services moderated over the previous month, while agriculture soared 14.1% in January, well above the 3.4% increase tallied in December.
Sequential data, however, do not corroborate the slowdown suggested by the annual data. Economic activity increased a seasonally-adjusted 0.22% over the previous month, which contrasted the 0.36% contraction observed in December.
Author: Ricardo Aceves, Senior Economist