Mexico: Strong first quarter growth confirmed
June 21, 2011
A more complete set of GDP data confirmed the previously reported 4.6% annual expansion in the first quarter. As in previous quarters, growth continued to be supported by dynamic external demand, despite exports moderating somewhat over the previous quarter. Domestic demand slowed from a 4.5% expansion in the fourth quarter to a 3.7% increase, mainly driven by a downward shift in inventories. Meanwhile, growth in total consumption inched up to 4.3%, as stronger private consumption of 4.9% (Q4: +4.6% year-on-year) offset a deceleration in public consumption (Q4: +1.9% yoy; Q1: +1.3% yoy). Moreover, gross fixed investment picked up to a healthy 7.7% increase (Q4: +6.4% yoy). On the external front, imports decelerated more markedly than exports, which improved the contribution of the external sector to overall growth. Imports moderated to a 10.9% expansion (Q4: +16.6% year-on-year), while exports slowed to a 14.1% increase (Q4: +16.9% yoy). As a result, the contribution of the external sector to overall growth swung from minus 0.2 percentage points in the previous quarter to 0.9 percentage points. The Central Bank currently expects the economy to expand between 4.0% and 5.0% this year and between 3.8% and 4.8% in 2012.