Mexico GDP


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.

In November, the Central Bank (Banxico) revised Mexico’s growth forecasts and now expects the economy to grow between 2.0% and 2.5% in 2014 (previous estimate: 2.0% and 2.8%). For 2015, the Bank also lowered its projections and now sees the economy growing between 3.0% and 4.0% (previous estimate: 3.2% and 4.2%). LatinFocus Consensus Forecast panelists’ projection is in line with the Bank’s assessment. They see the economy increasing 2.5% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects growth to pick up to 3.7%.

Author:, Senior Economist

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Mexico GDP Chart

Mexico GDP Q3 2014 0

Note: Year-on-year changes of GDP in %.
Source: Mexico National Statistics Institute (INEGI)

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