Mexico GDP

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Mexico: Economy improves in first quarter but growth is still weak

May 23, 2014

In the first quarter, GDP increased 1.8% over the same quarter last year, which marked an improvement compared to the tepid 0.7% expansion registered in the fourth quarter. The reading, however, undershot the 2.1% increase the markets had expected and fell just shy of the 1.9% expansion LatinFocus panelists had projected last month.

The acceleration in Q1 reflected a broad-based improvement in the main economic sectors. Agriculture bounced back from a 0.2% contraction in the fourth quarter to a strong 4.9% expansion in the first. Industry increased 1.6% in Q1, which contrasted the 0.4% decrease registered in Q4. Notable was an astounding 4.3% surge in manufacturing, which more than doubled the 1.9% rise registered in Q4. Meanwhile, the services sector grew 1.8% over the same quarter last year, which followed the 1.3% expansion tallied in the fourth quarter.

A quarter-on-quarter comparison showed that GDP grew a seasonally-adjusted 0.3% in Q1, which was up from the 0.1% increase observed in Q4.

Against a backdrop of still weak economic growth in Q1, the Finance Ministry lowered its growth forecasts for this year from 3.9% to 2.7%. The Central Bank (Banxico) also revised its growth forecasts and now expects the economy to grow between 2.3% and 3.3% in 2014 (previous estimate: 3.0%–4.0%). LatinFocus Consensus Forecast panelists’ projection is in line with the Bank’s assessment. They see the economy increasing 3.1% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects growth to pick up to 3.9%.


Author:, Senior Economist

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Mexico GDP Q1 2014

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


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