Mexico Economic Activity June 2017


Mexico: Economic activity softens slightly in June

August 22, 2017

The monthly proxy GDP (IGAE) produced by National Statistics Institute (INEGI) expanded 2.4% in annual terms in June. This figure was somewhat below the 3.1% expansion recorded in the previous month, but came in slightly above expectations of a 2.3% increase through the month.

The main driver of growth was the services sector (June: +3.9% year-on-year; May: +4.4% yoy), which now has expanded without interruption for 14 months in a row. The slightly slower pace of growth resulted from a softer expansion in retail and transport activity, which nonetheless remained strong. Conversely, growth in the industrial sector swung back into contractionary territory with a 0.3% decrease after having expanded 1.0% in May. The sector’s performance reflected weaker growth in manufacturing activity and unrelenting woes in the oil industry. On a better note, the agricultural sector expanded 2.0% in June, which contrasted the 0.2% decrease recorded in the previous month.

On a monthly basis, economic activity increased 0.5% in seasonally-adjusted terms in June, an acceleration from May’s 0.2% 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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