Current Account in Mexico
Mexico - Current Account
Current account deficit widens amid recovering domestic demand
The current account registered a deficit of USD 1.8 billion in the third quarter, which was larger than the previous quarter's deficit of USD 0.6 billion, but smaller than the USD 3.6 billion deficit incurred in the same quarter last year. Moreover, the reading came in above market expectations, which had the current account deficit reaching USD 3.0 billion in the third quarter. The quarterly figure was mostly led by a widening of the trade balance deficit (Q2: USD 0.1 billion; Q3: USD 2.3 billion). Exports reached USD 75.5 billion, which represented a minor improvement over the previous quarter (Q2: USD 74.7 billion) while imports rose more markedly form USD 74.7 billion in the second quarter to USD 77.8 billion in the third quarter. Furthermore, a wider deficit in the services balance also contributed to the deterioration of the current account, as it increased from USD 2.7 billion in the second quarter to USD 3.0 billion in the third quarter. Yet, the widening deficit was partially offset by an improvement in the income balance deficit (Q2: USD 3.8 billion; Q3: USD 2.1 billion). Meanwhile, the transfers balance fell from a USD 5.9 billion surplus in the second quarter to a USD 5.6 billion surplus in the third quarter, driven almost entirely by lower remittances from workers abroad, which dropped to USD 5.5 billion (Q2: USD 5.8 billion). Owing to the moderate quarterly reading, the moving annual current account deficit shrank from USD 5.3 billion in the second quarter to USD 3.5 billion in the third quarter.
Mexico - Current Account Data
|Current Account (% of GDP)||-2.7||-2.3||-1.8||-2.1||-0.3|
5 years of economic forecasts for more than 30 economic indicators.
Mexico Current Account Chart
Source: Mexico Central Bank (Banxico) and FocusEconomics calculations.
|Bond Yield||6.87||-0.24 %||Dec 31|
|Exchange Rate||18.93||-0.29 %||Jan 01|
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May 13, 2021
On 13 May, the Governing Board of the Bank of Mexico (Banxico) unanimously decided to keep the target for the overnight interbank interest rate at 4.00%, marking the second consecutive hold after a 25 basis-point rate cut earlier in the year. The decision was likely driven by the desire to keep price pressures in check, as both headline and core inflation have been above the Bank’s 3.0% target in recent months, with headline inflation reaching a multi-year high in April.
May 7, 2021
Consumer confidence rose to 42.4 in April from March's 40.8.
May 7, 2021
Consumer prices increased 0.33% in April over the previous month, moderating from March's 0.83% increase.
May 3, 2021
The manufacturing PMI produced by IHS Markit climbed from 45.6 in March to 48.4 in April, the highest reading in over one year.
April 30, 2021
Remittances summed USD 4.2 billion in March, representing a 2.6% year-on-year expansion.