Mexico’s economy continues to show positive signs of growth, albeit slower than expected. The Gross Domestic Product (GDP) had a growth of 1% in the first quarter of 2023, according to the revised data from the National Institute of Statistics and Geography (Inegi). The data was lower from 1.1% since the timely estimate revealed in April, although it is the best performance of GDP since the second quarter of last year, according to seasonally adjusted figures.
The growth of the economy has shown six consecutive quarters with growth, something that has not happened since the first quarter of 2016. “The growth data continues to be positive and implies an expansion of 1.8% compared to the fourth quarter of 2019, previous at the beginning of the pandemic”, indicates Gabriela Siller, director of economic analysis at Grupo Base.
Within the index, primary activities (agriculture and livestock) contracted 2.8% during the first part of 2023, but showed annual growth of 2.9%, due to accumulated growth in the three previous quarters. Meanwhile, secondary activities (industry and manufacturing) grew 0.6% in the quarter and 2.4% at the annual rate. In the end, tertiary activities (services and commerce sector) grew 1.5% in the first quarter and 4.2% at an annual rate, being the main driver of GDP growth during the first quarter, being this sector the one that best Performance has shown since 2015, not counting 2020, when activities were suspended due to the covid-19 health emergency.
“The expectation remains that in 2023 Mexico’s GDP will grow between 1.7% and 2%, although there are still risks to growth due to the high probability of a recession in the United States, which could affect Mexico’s GDP at through remittances and exports”, explains Siller.
At the beginning of April, the International Monetary Fund announced that it expects the Mexican economy to grow 1.8% in 2023, after growth of 3.1% in 2022. The streak of rises in GDP has been accompanied by a fall in the inflation in the country. In April, the annual inflation rate was 6%, the lowest data since September 2021. During the first 15 days of this month, the products that dropped the most in price were electricity, with a decrease of 21.22 %, lemon with a decline of 16.63% and chicken, with a drop of 1.51%.
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