Mexico: GDP growth accelerates in the third quarter and beats market expectations
According to a preliminary reading, GDP growth accelerated somewhat to 1.0% on a seasonally adjusted quarter-on-quarter basis in the third quarter, up from 0.9% in the second quarter and beating market expectations for a slowdown to 0.6%.
The services sector grew 1.2% over the previous quarter in seasonally-adjusted terms in the third quarter, edging up from the second quarter’s 0.9% increase. The reading was likely aided by a recovering tourism sector, the fading impact of both Covid-19 and last years outsourcing ban, and strong remittances. Meanwhile, industrial sector growth was steady at 0.9% in Q3, amid strong vehicle production in the quarter. Primary sector growth improved to 1.8% in Q3, compared to the 0.9% expansion recorded in the prior quarter.
On an annual basis, economic growth improved to 4.2% in Q3, following the previous period’s 2.0% increase. Q3’s reading marked the best result since Q3 2021.
Despite the upside Q3 surprise, our panelists see economic conditions deteriorating ahead amid tighter monetary policy, slowing growth abroad and the end of the post-pandemic normalization of services activity.