Mexico: Robust third quarter growth confirmed
December 21, 2011
A more complete set of GDP data confirmed the 4.5% year-on-year expansion in the third quarter reported earlier. The healthy print came in well above the 3.2% pace recorded in the second quarter and mirrored the pace seen in the first quarter. The improvement was underpinned by positive developments in the domestic sector, with domestic demand picking up from a 3.0% increase in the second quarter to a 5.1% expansion in the third. Stronger private consumption (Q2: +4.1% yoy; Q3: +5.2% yoy) and a modest rebound in government spending (Q2: -2.5% yoy; Q3: +0.5% yoy) were the key drivers behind the improvement. Moreover, fixed investment expanded a robust 8.9% which, nevertheless, was below the 9.4% increase observed in the second quarter. On the external side, the external sector's net contribution to overall growth swung from plus 0.2 percentage points in the second quarter to minus 0.7 percentage points in the third quarter. Exports decelerated from 7.6% growth in the second quarter to a 4.3% increase in the third. Imports also moderated, albeit less markedly, down from a 6.9% increase in the second quarter to 6.2% expansion in the third. In its latest inflation report for the third quarter, the Central Bank cut its growth projections to between 3.5% and 4.0% for 2011 (previous forecast: +3.5% to +4.5%) and to between 3.0% and 4.0% for 2012 (previous forecast: +3.5% to +4.5%).