Mexico: Economy maintains pace on stronger private consumption
March 19, 2013
In the fourth quarter, GDP rose 3.2% over the same period the year before. The reading was in line with data released by the statistical institute on 18 February and mirrored the revised 3.2% rise seen in Q3 2012. The stable reading was mostly the result of stronger private consumption offsetting lower growth in fixed investment as well as a negative contribution from the external sector to overall growth.
On the domestic sector, total consumption accelerated to a 3.1% expansion in the fourth quarter (Q3 2012: +2.0% year-on-year), entirely driven by a pick-up in private consumption (Q3: +2.2% yoy; Q4: +3.6% yoy). In contrast, government consumption decelerated a notch (Q3: +0.4% yoy; Q4: +0.2% yoy). Moreover, growth in fixed investment fell from 4.7% in Q3 to 4.1% in Q4.
Meanwhile, exports of goods and services rose from a 2.4% increase to a 4.7% expansion. Imports, however, picked up from a 0.5% rise in Q3 to a 5.0% expansion in Q4. As a result, the external sector's net contribution to overall growth swung from plus 0.6 percentage points in the third quarter to minus 0.2 percentage points in the fourth.
A quarter-on-quarter comparison, however, suggests an improvement in economic activity, as GDP grew 0.8% in seasonally adjusted terms in Q4, which came in above the 0.4% expansion seen in Q3.
In its latest inflation report from February, the Central Bank projects the economy to grow between 3.0% and 4.0% this year and between 3.2% and 4.2% in 2014. LatinFocus panellists share the Bank's assessment and see the economy growing 3.5% this year, which is unchanged from last month's forecast. For next year, the panel expects growth to pick up to 3.9%.