Mexico: Economy contracts at a more moderate pace in Q3
October 30, 2019
The economy contracted again in the third quarter, according to a preliminary GDP estimate released by the Statistical Institute (INEGI) on 30 October. Economic activity fell 0.4% in year-on-year, unadjusted terms in Q3, less sharply than the 0.8% decline logged in the second quarter but landing below market expectations. Meanwhile, on a seasonally-adjusted, quarter-on-quarter basis, output rose 0.1% in Q3, marking the first quarterly expansion so far this year (Q2: 0.0% quarter-on-quarter s.a.).
The more moderate slump primarily reflected the improvement in the primary and secondary sectors of the economy. Annual growth in agricultural production picked up markedly to 5.4% in Q3 (Q2: +1.4% year-on-year), while industrial sector output declined a more modest 1.7% year-on-year (Q2: -3.0% yoy), with the construction and mining sectors continuing to drag on the overall sector. Less encouragingly, however, services-sector activity slipped 0.1% annually in Q3, the first fall in nearly a decade and weighing on the overall reading (Q2: 0.0% yoy).
The INEGI will release a second GDP estimate on 25 November.
Author: Javier Colato, Economist