According to preliminary estimates from INEGI, Mexico’s economy showed better-than-expected growth in the first quarter of the year, compared to the previous three months. The country’s GDP expanded by 0.2% quarter-on-quarter, slightly above the 0.0% expected by economists. This growth was mainly driven by a rise in services, but was offset by a downturn in the primary sector.
On a yearly basis, Mexico’s economy grew by 1.6% compared to the same period last year. However, this growth rate was lower than the 2.5% posted in the previous quarter and below the projected 2.1% growth rate for this quarter. Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, stated that these figures confirm a deceleration in economic growth due to various challenges such as tighter financial conditions and difficult external conditions.
Despite the slowdown, Mexico’s economy has now seen expansion for ten consecutive quarters. Abadia mentioned that while there is still positive quarterly growth, it appears sluggish compared to recent trends.
The data also indicated that increased infrastructure spending and pre-election support to households were not enough to offset the challenges faced by the economy.
In conclusion, while Mexico’s economy showed mixed results in Q1 with positive quarterly growth but slower yearly growth compared to previous periods, it still continues its upward trend despite facing external and financial constraints that have impacted its overall growth momentum.
