Mexico GDP


Mexico: GDP growth picks up in Q1

June 19, 2014

In the first quarter, GDP increased 1.8% over the same period last year. The reading marked an improvement over the 0.7% expansion registered in Q4 but came in below the 2.1% rise the markets had expected.

Q1’s result confirmed the first estimate of GDP on a production basis. On an expenditure basis, the improvement reflected a better economic performance in domestic demand. On the domestic front, total consumption accelerated from a 1.5% year-on-year increase in Q4 to a 1.6% expansion in Q1. Total consumption was underpinned by faster growth in government spending (Q4: +2.1% year-on-year; Q1: +2.9 yoy), while private consumption maintained the pace of growth over the fourth quarter (Q1: +1.4% yoy). Gross fixed investment decreased 0.8% in Q1, which, nonetheless was better than the 3.0% contraction tallied in Q4.

On the external front, growth in exports of goods and services quickened from 5.8% in Q4 to 7.2% in Q1. Imports bounced back from a 0.3% decrease in Q4 to a 4.4% expansion in Q1. As a result of the strong comeback from imports, the external sector’s net contribution to overall economic growth fell from 1.8 percentage points in Q4 to only 0.8 percentage points in Q1.

Sequential data showed that GDP increased a seasonally-adjusted 0.3% over the previous quarter in Q1, which was up from the 0.1% rise tallied in Q4.

The Finance Ministry lowered its growth forecasts for this year from 3.9% to 2.7%. The Central Bank (Banxico) also revised its growth forecasts and now expects the economy to grow between 2.3% and 3.3% in 2014 (previous estimate: 3.0%–4.0%). LatinFocus Consensus Forecast panelists’ projection is in line with the Bank’s assessment. They see the economy increasing 3.1% in 2014, which is unchanged from last month’s forecast. For 2015, the panel expects growth to pick up to 3.9%.

Author:, Senior Economist

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Mexico GDP Chart

Mexico GDP Q1 2014 0

Note: Year-on-year changes of GDP in %.
Source: Mexico National Statistics Institute (INEGI)

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