Mexico: GDP growth slows in Q3, but sequential data rebounds
November 21, 2013
In the third quarter, GDP increased 1.3% over the same quarter last year, which marks a deceleration compared to the revised 1.6% expansion recorded in the second quarter (previously reported: +1.5% year-on-year). The reading beat the 1.0% rise market analysts had expected.
The deterioration in economic activity was mainly led by a slowdown in agriculture (Q2: +3.0% yoy; Q3: +1.0% yoy) and slower growth in services (Q2: +2.6% yoy; Q3: +2.3% yoy). Moreover, the industrial sector contracted further in the third quarter (Q2: -0.3% yoy; Q3: -0.6% yoy).
Sequential data, however, suggest that there was a rebound in the third quarter. GDP increased a seasonally-adjusted 0.8% over the previous quarter, which contrasted the 0.6% contraction reported in the second quarter.
The Central Bank (Banxico) expects the economy to grow between 0.9% and 1.2% this year. For 2014, Banxico sees economic growth of between 3.0% and 4.0%. LatinFocus Consensus Forecast panelists' projection is in line with the Bank's assessment. They see the economy increasing 1.2% this year, which is down 0.1 percentage points from last month's forecast. For next year, the panel expects growth to pick up to 3.5%, which is unchanged from last month's projection.
Author: Ricardo Aceves, Senior Economist