Mexico: Economy expands at slowest pace in over two years in Q3
October 31, 2016
Mexico’s GDP lost momentum in the third quarter, according to a preliminary estimate released by the National Statistics Institute (INEGI) on 31 October.
The flash estimate showed that the economy increased 2.0% in Q3 over the same period last year, which was in line with market expectations and represented a deceleration from the 2.5% expansion observed in Q2 and the slowest growth rate since Q2 2014. That said, sequential data adjusted for seasonal factors showed that the economic performance had improved substantially: GDP jumped 1.0% in Q3 over the previous quarter, which contrasted the 0.2% decrease registered in Q2 and marked the fastest quarterly expansion in more than two years.
According to INEGI, Q3’s economic slowdown was mainly the result of a deterioration in industry. Growth in the secondary sector swung from a 1.0% year-on-year increase in Q2 to a 1.0% contraction in Q3. Conversely, both the agricultural and services sectors gained momentum in the third quarter, expanding 4.9% (Q2: +3.8% yoy) and 3.3% (Q2: +3.2% yoy), respectively. More complete data will be released on 23 November
Author: Ricardo Aceves, Senior Economist