Mexico: Domestic demand buttresses economic growth in Q3
December 22, 2014
In the third quarter, GDP increased 2.2% over the same quarter last year, which came in above the 1.6% expansion observed in the previous quarter. The reading fell short of the 2.3% expansion the markets had expected.
Q3’s result confirmed the initial estimate and showed that total consumption improved notably compared to the previous quarter (Q3: +2.3% year-on-year; Q2: +1.4% yoy) as growth in both private and government consumption accelerated over the previous quarter. In addition, gross fixed investment swung from a 0.6% contraction in Q2 to a 4.3% expansion in Q3.
On the external front, exports of goods and services accelerated from a 5.0% increase in Q2 to a 7.1% expansion in Q3. Imports’ growth also picked up pace from 3.5% in Q2 to 5.6% in Q3. The contribution from net exports to overall economic growth was 0.4 percentage points in Q3, which followed the 0.5 percentage-point contribution in Q2.
On a sequential basis, GDP grew a seasonally-adjusted 0.5% in Q3, which came in below the 0.9% expansion registered in Q2.
Author: Ricardo Aceves, Senior Economist