Mexico: Growth unexpectedly accelerates in third quarter
November 22, 2011
In the third quarter, GDP expanded a strong 4.5% over the same period last year, which mirrored the first quarter's increase and was well above the 3.2% pace seen in the second quarter. The robust print surprised the market on the upside, as analysts had expected the economy to grow a softer 3.7% The improvement was mainly buttressed by positive developments in the services sector, which accelerated from a 3.5% increase in the second quarter to a strong 4.8% expansion in the third quarter. In addition, agricultural output swung from a 5.7% contraction in the second quarter to an 8.3% increase in the third. In contrast, growth in the industrial sector was virtually unchanged over the previous quarter, at a still strong 3.4% (Q2: +3.5% year-on-year). A quarter-on-quarter comparison corroborates the acceleration suggested by the annual figures, as the economy grew a seasonally adjusted 1.34% over the previous three-month period, which came in slightly above the 1.28% expansion witnessed in the second quarter and marked the fastest pace since the second quarter of 2010. In its latest inflation report for the third quarter, the Central Bank cut its growth projections to between 3.5% and 4.0% for this year (previous forecast: +3.5% to +4.5%) and to between 3.0% and 4.0% for next year (previous forecast: +3.5% to +4.5%).