Sunday, May 26, 2024

Mexico’s GDP shows 3.6% annual growth in second quarter

Mexico’s economy grew 3.6% in the second quarter of 2023 compared to the same period last year, according to preliminary data published Monday by the National Institute of Geography and Statistics (INEGI).

INEGI’s estimate slightly exceeds market expectations: Grupo Monex estimated 3.2% growth and a survey conducted by Reuters anticipated 3.5%. This is the seventh consecutive quarter the Mexican economy has grown.

Andrés Abadia, chief Latin American economist for Pantheon Macroeconomics, noted that economic performance in Mexico has remained strong and stable in the second quarter of 2023, with “solid labor market conditions.” (Pantheon Macroeconomics)

The statistics agency said that the final data is expected to show quarter-on-quarter GDP growth of 0.9% compared to the first quarter of 2023  a slight slowdown from the 1% growth seen in the first quarter this year.

Regarding quarter-on-quarter growth, the tertiary sector — which covers a variety of services from transportation to healthcare — is estimated to be the strongest performer compared with last quarter, with 1% growth. The primary and secondary sectors are each expected to show quarterly growth of 0.8%. The primary sector includes companies involved in resource extraction and agriculture, while the secondary sector includes services such as manufacturing and construction. 

In terms of annual economic activity, the tertiary sector is again expected to show the most growth compared to the same quarter in 2022, at 4.1%. The primary and secondary sectors will register an expansion of 2.5% and 2.6%, respectively. 

Mexico’s positive economic activity caused the International Monetary Fund to adjust its growth forecast for Mexico, raising it to 2.6% from its previous estimate of 1.9%.

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Mexico’s service sector, which includes everything from restaurant services to healthcare, is still going strong, showing a preliminary growth of 4.1% compared to the second quarter of 2022 and 1% quarter-on-quarter growth in 2023. (Cuartoscuro)

The Mexican economy grew by 3.1% in 2022

According to Banco BASE economist Gabriela Siller, the Mexican economy is expected to grow 3% this year. If GDP then grows 2% from 2024 onward, GDP per capita will fully recover to its 2018 levels by 2026.

With reports from Expansión, INEGI and Reuters

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