Mexican economy slows in Q2; GDP grows only 0.2%
In the second quarter, GDP recorded annual growth of 1.1%, with Services achieving an annual increase of 1.7%, but failing to offset the modest performance of the industry and the decline in primary activities.
Mexico’s Gross Domestic Product (GDP) for the second quarter of the year registered an annual growth of 1.1% in real terms and with seasonally adjusted figures, reported the National Institute of Statistics and Geography (Inegi).
The preliminary GDP estimate on an annual basis marked seven consecutive quarters of deceleration since the peak reached in the third quarter of 2022, when it showed an annual expansion of 4.64%. The 12-month record for the April to June period was the least dynamic in 11 quarters, since the last quarter of 2021.
The information released by Inegi surprised private sector specialists consulted by the Bank of Mexico, who had forecasted an annual growth of 2.16%.
From New York, Goldman Sachs’ Latin America economist Alberto Ramos noted that “the resilience of economic growth has softened since the fourth quarter of 2023 and throughout the first half of the year.”
This moderation suggests a weak performance for the second half of the year, where the impact of high interest rates on activity is expected to materialize. Additionally, political uncertainty due to legal changes from the legislative transition, a public administration beginning to correct first-half spending, weak business confidence, and moderate external demand are highlighted.
The preliminary snapshot of Mexico’s economic activity shows an annual growth of 1.7% in tertiary activities, including services and commerce, which was not enough to compensate for the modest 0.5% growth in secondary activities, particularly industry. There was also a 2.2% annual contraction in primary activities, encompassing agriculture and livestock.
The estimated GDP reading indicates a 0.2% increase compared to the previous quarter.
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