Mexico’s Economy Records 1.0% Growth in Q1 2023, Slightly Below Initial Estimates

Service and Manufacturing Sectors Drive Quarterly Growth

Mexico’s economy showed signs of expansion in the first quarter of 2023, with a growth rate of 1.0% compared to the previous three-month period, according to the national statistics agency INEGI.

While this figure matched the forecasts of economists in a Reuters poll, it was slightly below the preliminary estimates disclosed by INEGI a month ago, which had projected a 1.1% increase in gross domestic product (GDP) on a sequential basis.

Analysts had acknowledged the initial data as “solid” but anticipated potential headwinds from a slowdown in the U.S. economy and a tight monetary policy that could impact Mexico’s performance in the subsequent quarters.

Tertiary Sector Leads Growth, Primary Activities Contract

The quarterly growth in Mexico’s economy was primarily driven by a 1.5% rise in the tertiary sector, which encompasses various service industries, and a 0.6% increase in secondary activities, including manufacturing.

However, primary activities such as farming, forestry, fishing, and mining experienced a contraction of 2.8%. On an annual basis, the economy expanded by 3.7% in the first quarter of 2023 compared to the same period a year earlier.

Although this growth was slightly below both market expectations and the previous preliminary data projection of 3.9%, it still reflects a positive trend for Mexico’s overall economic performance. More details are awaited.