Mexico: GDP shows slower but solid performance in Q2, sequential data signal improvement
August 21, 2014
In the second quarter, GDP increased 1.6% over the same period last year. The reading represented a slight moderation compared to the revised 1.9% expansion tallied in the first quarter (previously reported: 1.8% year-on-year), but overshot the 1.5% increase the markets had expected.
The weaker annual reading in Q2 reflected a broad-based deceleration in the main economic sectors. Agriculture increased 2.6% in the second quarter, which was below the 4.6% expansion observed in Q1. Industry rose 1.0% in Q2, which was slower than the 1.6% expansion registered in the previous quarter. Meanwhile, the services sector continued to grow, albeit at a slower pace: the sector increased 1.8% in Q2, slightly down from the 1.9% rise observed in Q1.
Sequential data, however, showed a notable improvement in economic activity in the second quarter. GDP expanded an astounding seasonally-adjusted 1.0% over the preceding quarter. The print was more than double the 0.4% expansion registered in the first quarter. Most analysts agree that the seasonally-adjusted GDP data in Q2 and more recent economic indicators suggest that a moderate but sustainable recovery is on its way in the second half of the year.
Author: Ricardo Aceves, Senior Economist