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Mexico Economic Activity April 2024

Mexico: Economic activity contracts at sharpest pace since August 2021 in April

The monthly indicator for economic activity (IGAE) declined 0.6% month-on-month in seasonally adjusted terms in April (March: 0.0% mom). The result marked the worst reading since August 2021. April’s weakening was driven by lower primary, secondary and tertiary output.

On an annual basis, economic activity increased 5.4% in April, rebounding notably from March’s 1.3% fall and marking the best result since August 2022. However, the reading was likely flattered by the timing of Easter, which fell in March this year. Meanwhile, annual average economic activity growth rose to 3.0% in April (March: +2.7%), pointing to an improving trend.

On the outlook, EIU analysts said:

“Market jitters following the June 2nd election have complicated the economic outlook; this may well dampen demand in the coming months. The ruling Movimiento Regeneración Nacional (Morena) is set to come just a few seats shy of a supermajority in the legislature, opening up the possibility of passing a number of radical judicial, electoral and regulatory reforms that could have a negative impact on the investment environment (our baseline view is that some reforms will pass, but in a watered-down form).”

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