Mexico: GDP grows at slowest pace in over three years on weak manufacturing and construction
May 17, 2013
In the first quarter, GDP grew a paltry 0.8% over the same period last year, which marks the slowest pace of expansion in over three years. The subdued reading represents only a fraction of the 3.2% expansion seen in the final quarter of 2012 and undershot market expectations of a 1.1% rise.
The moderation in economic activity was broad-based, with all major sectors - agriculture, industry and services - faring poorer compared to the preceding quarter. In particular, output in the industrial sector swung from a 1.8% expansion to a 1.5% contraction, which represents the worst figure recorded since the final quarter of 2009. Meanwhile, the agricultural sector slowed from a robust 7.2% expansion in Q4 2012 to a 2.8% increase in Q1, while services moderated to a 1.9% expansion (Q4: +3.4% year-on-year).
A quarter-on-quarter comparison confirms a moderation in economic activity, as GDP increased a seasonally adjusted 0.5% in the first quarter, which came in below the 0.7% rise recorded in the previous quarter.
In its latest inflation report from May, the Central Bank maintained its forecasts of the economy growing between 3.0% and 4.0% this year and between 3.2% and 4.2% in 2014. LatinFocus Consensus Forecast panellists share the Bank's assessment and see the economy increasing 3.3% this year, which is down 0.2 percentage points from last month's forecast. For next year, the panel expects growth to pick up to 3.9%.