Mexico: GDP accelerated in Q3 due to strong domestic demand
December 18, 2015
Mexico’s economy gained momentum in the third quarter, with growth benefiting from strong domestic demand and healthy performance in the external sector, despite global headwinds. GDP increased 2.6% in Q3 over the same period of the previous year, which came in above the 2.4% expansion observed in Q2 and the 2.4% the markets had expected.
Domestic demand, particularly private consumption, was the main contributor to GDP acceleration in Q3. Private spending grew a healthy 2.9% in Q3, which came in a notch above the 2.8% increase in Q2. Government consumption, on the other hand, decelerated in Q3, when it expanded 1.1% (Q2: +2.6% year-on-year). Moreover, gross fixed capital formation slowed from a 5.5% expansion in Q2 to a 4.1% increase in Q3.
The contribution from net exports to overall economic growth was virtually unchanged in Q3. The contribution inched down from 1.3 percentage points in Q2 to 1.2 percentage points in Q3. Imports of goods and services expanded 6.2%, which was faster that the growth rate registered in Q2 (+5.4% yoy). Exports expanded a notable 10.0% in Q3, which came in above the 9.3% expansion tallied in Q2.
A quarter-on-quarter comparison corroborated that Mexico’s economy improved in the third quarter. GDP increased 0.8% in Q3 in seasonally-adjusted terms, which was faster than the 0.6% expansion observed in Q2.
Author: Ricardo Aceves, Senior Economist