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Mexico GDP Q1 2019

Mexico: Mexico’s economy disappoints in Q1

A preliminary estimate for growth in the first quarter revealed weaker-than-expected economic activity at the outset of the year. In annual terms, unadjusted output grew at 1.3% year-on-year—down sharply from 1.7% in the fourth quarter last year and a couple of notches below analysts’ expectations. Meanwhile, seasonally-adjusted quarter-on-quarter output contracted (Q1: -0.2% quarter-on-quarter s.a.; Q4 2018: +0.2% qoq s.a.) amid a slump in industrial-sector activity.

Following the release of several upbeat demand-side indicators for January and February, the unadjusted first-quarter figures stunned a number of analysts. A supply-side breakdown showed that, on an annual basis, industrial-sector output fell for the third time in five quarters (Q1: -0.7% year-on-year; Q4 2018: -0.9% yoy); this was also consistent with industrial-sector indicators north of the Rio Grande. Services-sector output, on the other hand, decelerated considerably (Q1: +1.9% yoy; Q4 2018: +2.7% yoy) despite strong wage growth and resilient consumer confidence; analysts have, however, suggested that the Statistical Institute’s (INEGI) seasonal-adjustment surrounding the Easter holiday requires recalibrating. Agricultural-sector output, lastly, jumped in the quarter (Q1: +5.9% yoy; Q4 2018: +3.0% yoy).

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