Mexico’s economy experienced better-than-expected growth in the first quarter of the year, with a 0.2% increase in GDP compared to the previous three months, according to preliminary estimates from INEGI. This growth rate was slightly above the 0.0% expected by economists and mainly driven by an increase in services.
On a yearly basis, Mexico’s economy expanded by 1.6% compared to the same period last year, which was below the projected 2.1% growth rate and lower than the previous quarter’s 2.5%. Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, stated that this confirms a deceleration in economic growth due to various challenges such as tighter financial conditions and difficult external conditions.
Despite this slowdown, Mexico’s economy has now seen expansion for ten consecutive quarters. However, the growth momentum appears sluggish compared to recent trends, with increased infrastructure spending and pre-election support to households not enough to offset these challenges faced by the economy.
In conclusion, Mexico’s economy showed mixed results in the first quarter, with positive quarterly growth but slower yearly growth compared to previous periods. These challenges have impacted overall growth momentum and could continue to affect future economic performance if not addressed promptly.