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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.

In August, the Central Bank (Banxico) revised Mexico’s economic growth prospects and now expects the economy to grow between 2.0% and 2.8% in 2014 (previous estimate: 2.3% and 3.3%). For 2015, the Bank maintained its growth estimate between 3.2% and 4.2%. Meanwhile, the Finance Ministry maintained its growth forecast at 2.7% for this year. LatinFocus Consensus Forecast panelists’ projection is in line with the government’s assessment. They see the economy increasing 2.5% in 2014, which is down 0.1 percentage points from last month’s forecast. For 2015, the panel expects growth to pick up to 3.8%.


Author:, Senior Economist

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Mexico GDP Q2 2014

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


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