Mexico: Economic activity weakens in November
January 27, 2014
Economic activity was flat compared to the same month of the previous year in November according to the IGAE (Indicador Global de la Actividad Economica). The figure came in below the 1.4% increase registered in October and undershot the 0.8% expansion the market had expected.
The subdued print primarily resulted from a deterioration in agriculture (October: +11.2% year-on-year; November: -3.8% yoy) as well as a decrease in industry (October: +0.3% yoy; November: -1.4% yoy). The only expansion was recorded in services (October: +1.7% yoy; November: +1.0% yoy).
On a sequential basis, however, economic activity expanded 0.4% over the previous month in seasonally-adjusted terms and came in above the 0.3% expansion observed in October. The trend, however, still points downward. Annual average growth in economic activity fell from 1.5% in October to 1.2% in November, which marked the lowest reading in almost three-and-a-half years.
The Central Bank (Banxico) expects the economy to grow between 3.0% and 4.0% in 2014. LatinFocus Consensus Forecast panelists' projection is in line with the Bank's assessment. They see the economy increasing 3.4% in 2014, which is unchanged from last month's forecast. For 2015, the panel expects growth to pick up to 3.9%.
Author: Ricardo Aceves, Senior Economist