Mexico: Growth beats market expectations
February 21, 2011
In the fourth quarter, GDP grew 4.6% over the same period last year. The print came in below the third quarter's 5.3% expansion but beat market analyst expectations, which had the economy growing 4.4%. The deceleration reflects, in part, the fading of a favourable base effect that had boosted growth figures. That said, slower growth in the industrial sector, which moderated from a 6.2% expansion in the third quarter to a 4.7% increase, was mostly responsible for the modest deceleration. Meanwhile, growth in the services sector, which represents nearly two thirds of the economy, inched up to 4.2% (Q3: +4.0% year-on-year). Finally, agriculture continued its robust recovery, expanding 9.9% (Q3: +8.7% yoy). In fact, a quarter-on-quarter comparison suggests that the economy is gathering momentum. In the final quarter of 2010, the economy grew 1.26% over the previous quarter, which marked an improvement compared to the previous quarter's 0.80% expansion. In the full year 2010, the economy increased 5.5%, which was the strongest pace of expansion in 10 years and represented a significant rebound from the 6.1% contraction tallied in 2009. The Central Bank anticipates the economy to grow between 3.8% and 4.8% in both this year and next.