Mexico: Economic activity gains momentum in October
January 9, 2014
Economic activity expanded 1.3% over the same month of the previous year in October 2013 according to the IGAE (Indicador Global de la Actividad Economica). The figure came in above the 0.9% increase registered in September, but fell short of market expectations of a 1.5% rise.
October's improvement came on the back of a hefty expansion in agriculture (September: +7.2% year-on-year; October: +11.4% yoy) as well as an increase in industry (September: -1.4% yoy; October: +0.1% yoy). The only deceleration compared to the previous month was recorded in services.
On a sequential basis, economic activity expanded 0.3% over the previous in seasonally-adjusted terms, which contrasts the 0.3% contraction observed in September.
Meanwhile, the trend continues to point downward, with annual average growth in economic activity falling from 1.7% in September to 1.5% in October. This marks the lowest reading in more than three years.
Mexico's Central Bank (Banxico) expects the economy to grow between 3.0% and 4.0% in 2014. LatinFocus panelists see the economy growing 3.4% in 2014, which is down 0.1 percentage points from last month's forecast. The panel expects growth to pick up to 3.9% in 2015.
Author: Ricardo Aceves, Senior Economist