Mexico: GDP growth decelerates in Q4
February 21, 2014
In the fourth quarter of 2013, GDP increased 0.7% over the same period of the previous year, which was just half of the growth rate observed in the third quarter (Q3: +1.4% year-on-year). The reading undershot the 1.0% expansion the market had expected.
The deceleration in Q4 reflected a broad-based deterioration in the main economic sectors. Output in agriculture deteriorated from a 0.8% increase in Q3 to a 0.3% contraction in Q4. Industry decreased 0.4% annually in Q4, which followed the 0.5% contraction observed in Q3. Meanwhile, services increased 1.3% in the fourth quarter, which came in below the 2.5% expansion registered in the third quarter.
A quarter-on-quarter comparison confirms the deceleration suggested by the annual data; GDP increased a weak 0.2% in Q4 in seasonally-adjusted terms. The print came in well below the 1.0% expansion registered in Q3.
In the full year 2013, the economy grew 1.1%, which was well below the 3.9% expansion registered in 2012 and marked the softest growth rate since 2009.
The Central Bank (Banxico) expects the economy to grow between 3.0% and 4.0% in 2014. LatinFocus Consensus Forecast panelists' projection is in line with the Bank's assessment. They see the economy increasing 3.4% in 2014, which is unchanged from last month's forecast. For 2015, the panel expects growth to pick up to 3.9%.
Author: Ricardo Aceves, Senior Economist