Mexico: Economic activity decelerates amid waning base effect
April 27, 2011
In February, economy activity increased 4.7% over the same month last year, according to the monthly indicator for economic activity (IGAE, Indicador Global de la Actividad Economica). The reading represented a deceleration over the 5.9% increase observed in January but was only a notch below market expectations. The deceleration was broad-based, with all sectors slowing over the previous month. In particular, agriculture swung from a 6.9% expansion in January to a 6.2% contraction. Moreover, a slowdown was also observed in industry, which grew 5.2% (January: +6.7% year-on-year), while services increased 4.8% (January: +5.1% yoy). However, the year-on-year slowdown partially owes to the ebbing of a favourable base effect that is likely to depress annual growth in the months ahead. A month-on-month comparison only suggests a modest deceleration, as the index grew a seasonally adjusted 0.29% over the previous month (December: +0.94% month-on-month). Annual average growth in economic activity remained stable at January's 5.9%.