Mexico: Growth moderates in fourth quarter
February 16, 2012
In the fourth quarter, GDP grew 3.7% over the same period the year before. The reading was below the 4.5% expansion observed in the third quarter but in line with market expectations. The moderation over the previous quarter was broad-based. All components grew at a slower pace compared to the third quarter with the exception of government spending, which picked up from a 0.8% increase in the third quarter to a 1.8% expansion in the fourth quarter. Total consumption, however, moderated to 3.9% growth (Q3 2011: +4.4% yoy), amid a deceleration in private consumption (Q3 2011: +4.9% yoy; Q4 2011: +4.2% yoy). Meanwhile, fixed investment slowed markedly from an 8.9% increase to a 5.5% expansion. On the external side, both exports and imports lost steam during the fourth quarter. Growth in exports stepped down from 4.3% in the third quarter to 2.9%, while imports moderated from 6.3% growth in the third quarter to 4.4%. As a result, the external sector's net contribution to overall growth edged up from minus 0.8 percentage points in the third quarter to minus 0.6 percentage points. At a sector level, the slowdown was mainly driven by lower growth in the services and a decline in the agricultural sector. Services moderated from a 4.9% expansion in the third quarter to a 4.3% increase in the fourth quarter, whereas agriculture swung from a 7.9% expansion in the third quarter to a 0.5% contraction. Finally, output in industry grew 3.2%, which was down from the 3.5% increase seen in the third quarter. Compared to the previous quarter, the economy grew 0.42% in seasonally adjusted terms, which came in well below the 1.24% expansion recorded in the third quarter and marked, in fact, the slowest pace since the second quarter of 2009. In the full year 2011 the economy grew 3.9%, which was down from the robust 5.5% expansion tallied in 2010. In its latest inflation report from February, the Central Bank expects the economy to grow between 3.0% and 4.0% in both 2012 and 2013.