Investment in Mexico
Mexico - Investment
Economy grows in annual terms in Q2 although quarter-on-quarter data is less promising
In annual terms, expenditure-based national accounts data released on 20 September confirmed a broad-based improvement across aggregate-demand data in the second quarter. Metrics released by the Statistical Institute (INEGI) showed that the economy grew 2.6% year-on-year, up from the 1.4% expansion observed in the first quarter. Notably, aggregate supply and demand climbed 4.0% from a year earlier, just shy of analysts’ estimates. Despite the encouraging year-on-year figures, however, quarter-on-quarter and high-frequency datasets have continued to paint a far bleaker picture of the economy.
Domestic demand saw an all-around improvement in the second quarter. Household spending accelerated, ticking up to 3.0% annually (Q1: +2.6% year-on-year) and in line with the tight labor market and buoyant remittance inflows. Government spending also rose, growing 2.9% (Q1: +1.1% yoy). Meanwhile, fixed investment jumped in the quarter, expanding 3.9% (Q1: +1.4% yoy), despite the uncertainty generated in the run-up to the 1 July general election. That said, business leaders’ late-quarter embrace of the presidential frontrunner, Andrés Manuel López Obrador, may have bolstered capital spending.
On the external front, exports notched an exceptional 8.3% annual growth in the second quarter (Q1: +2.2% yoy) amid the weaker peso and healthy factory output in the United States. Along with import growth, which clocked in at 7.9% (Q1: +5.9% yoy), the external sector narrowly contributed to growth (Q2: 0.1 percentage points; Q1: minus 1.3 percentage points) in the quarter—the first time in more than a year.
Economic prospects for the second half of the year are brighter with election day in the rearview mirror. Moreover, the short-term outlook has been buoyed in recent weeks by the significant progress made in trade talks with the United States. Met the why particular analysts see the economy growing 2.2% this year, which is unchanged from last month’s Consensus Forecast. For 2019, the economy is again seen growing 2.2%, also unchanged from last month’s report.
Mexico - Investment Data
|Investment (annual variation in %)||-3.4||3.1||5.0||1.1||-1.5|
5 years of economic forecasts for more than 30 economic indicators.
|Bond Yield||8.08||-0.24 %||Oct 16|
|Exchange Rate||18.75||-0.29 %||Oct 16|
|Stock Market||48,192||0.12 %||Oct 16|
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October 8, 2018
After months of long, tense and threat-filled negotiations, Canada, the United States and Mexico finally struck an agreement to replace NAFTA on 30 September, quashing fears that North America’s tariff-free trading landscape could come to a sudden halt.
October 4, 2018
Consumer sentiment receded in September, with the seasonally-adjusted consumer confidence index published by INEGI ticking falling to 110.1 points from August’s revised 111.9 points (previously reported: 112.0 points).
October 4, 2018
At its 4 October monetary policy meeting, Banxico’s five-member board voted by a majority to hold the target rate at the nine-year high of 7.75%, in line with market expectations.
October 1, 2018
Remittances totaled USD 2.9 billion in August (July: USD 2.9 billion), a 9.1% increase from the same month last year.
October 1, 2018
Mexico’s manufacturing sector displayed mixed results in September.