Mexico: Economy records zero growth in the fourth quarter
According to a third reading, GDP was flat on a seasonally-adjusted quarter-on-quarter basis in the fourth quarter, above the 0.7% contraction logged in the third quarter, but still held back by the lingering impact of the law banning labor outsourcing that was approved last year. As a result, GDP is still notably below its pre-crisis level.
Private consumption bounced back, growing 1.4% seasonally-adjusted quarter-on-quarter in Q4 compared to a 0.3% contraction in Q3. Public spending contracted at a slower pace of 0.6% in Q4 (Q3: -2.4% s.a. qoq). Meanwhile, fixed investment declined 0.2% in Q4, contrasting the 1.0% expansion logged in the previous quarter.
Exports of goods and services growth moderated to 3.5% in Q4 (Q3: +4.1% s.a. qoq). In addition, imports of goods and services growth waned to 0.6% in Q4 (Q3: +1.9% s.a. qoq).
On an annual basis, economic growth lost steam, cooling to 1.1% in Q4, following the previous quarter’s 4.5% expansion. Q4’s reading marked the softest expansion since Q1.
Looking to Q1, flash estimates for economic activity in January and February suggest moderate economic growth, likely as the impact from the labor outsourcing law faded and automobile production averaged slightly higher relative to Q4.