A worker works on an LED TV assembly line at a factory that exports to the United States, in Ciudad Juarez, Mexico, September 21, 2016. REUTERS/Jose Luis Gonzalez/FILE PHOTO LICENSING RIGHTS
MEXICO CITY, Aug 29 (Reuters) – Mexico’s economy grew 0.8% in the second quarter compared to the previous three-month period, national statistics agency INEGI said on Tuesday, slightly below its preliminary estimate and prompting analysts to advance to warn of a slowdown.
INEGI estimated last month that gross domestic product (GDP) rose 0.9% in the April-June period. Analysts polled by Refinitiv expected the final numbers to show economic growth of 1.0% over the quarter.
A breakdown of the GDP figure showed that the key tertiary or service sector grew by 0.7%, below the 1% originally estimated.
Primary activities such as agriculture, fishing and mining rose 0.7% qoq, down a tenth of a percentage point from preliminary data.
Secondary activities, which cover manufacturing, grew 1.2%, beating the preliminary estimate of 0.8% and pointing to buoyant construction demand.
Overall, the quarter contributed to a “solid” first half, according to Pantheon Macroeconomics, with the first quarter posting a downwardly revised 0.8% gain. Nonetheless, it was warned that a slowdown in momentum was likely.
“Robust fundamentals, including a resilient labor market and falling inflation, are offsetting the strain from tighter financial conditions,” said Andres Abadia, Pantheon’s chief economist for Latin America, in a note.
However, he added that “tighter financial conditions and weakness in key sectors…are now a clear drag”, also citing the impact of “global conditions” and interest rates.
Mexico’s central bank held interest rates steady for the third time this month, with most analysts expecting rate cuts later this year.
Mexico’s economy grew 3.6% on an annualized basis in the second quarter, slightly below the preliminary estimate of 3.7%.
Mexico City newsroom reporting; writing from Isabel Woodford; Edited by Paul Simao and Grant McCool
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