tourists on beach in mexico Growth in tourism helped propel GDP numbers upward.

2nd-quarter growth strongest since 2013

Less uncertainty about US, higher household spending attributed

Annual economic growth in the second quarter of 2017 was the strongest since 2013, the national statistics agency (Inegi) reports.

Gross domestic product (GDP) increased 0.6% in the April – June period, down slightly from the 0.7% growth recorded from January to March.

However, the figure represents seasonally adjusted growth of 3% compared to the same period last year, the highest recorded since the second quarter of 2013 when the 3% figure was matched.

Agriculture grew 4.1%, industry was up 0.5% and the services sector recorded a 0.9% increase compared with figures for the second quarter of 2016.

Growth was 2.3% for the first half of the year compared to the same period last year.

The increase was driven by 3.5% growth in the services sector and 3.3% in agriculture compensating for a 0.3% decline in industrial output.

The services sector growth was propelled by financial services — which alone was up 10%, tourism and telecommunications.

The downturn in the industrial sector was mainly caused by a 10.1% reduction in mining, including petroleum. There was also a 1.2% decrease in the generation and distribution of electricity and gas and a 0.1% drop in construction.

Analysts from Banorte-Ixe said that growth in the second quarter of 2017 was due to less uncertainty around United States President Donald Trump’s election proposals and greater household spending. They expect the Mexican economy to record 1.9% growth by the year’s end.

In response to the latest Inegi figures, the Finance Secretariat (SHCP) indicated that it will update its current 2017 GDP growth forecast, of 1.5% to 2.5%, when it submits its 2018 budget proposal to Congress, which it must do by September 8.

The secretariat pointed out that the 2.3% growth already recorded in 2017 is equal to the increase for the whole of 2016 and that excluding petroleum the figure was 3.7%, the highest since the first half of 2012.

It said the biggest driver of the increase was domestic demand and acceleration of exports.

The SHCP also said just over 555,000 new jobs were created in the first half of 2017, the highest number for the period since 2000.

Source: Milenio (sp)

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