Mexico economy grows 0.2% in Q1 from previous quarter

By Thomson Reuters Apr 30, 2024 | 10:20 AM

(Reuters) – Mexico’s economy posted better-than-expected first-quarter growth versus the previous three months but lost steam on a yearly basis, preliminary estimates from national statistics agency INEGI showed on Tuesday.

Latin America’s second-largest economy posted a 0.2% gross domestic product (GDP) quarter-on-quarter expansion in the period, INEGI said, slightly above the 0.0% expected by economists polled by Reuters.

The relatively tepid performance was attributed mainly to a downturn in the primary sector which was partially offset by a rise in services.

The economy expanded by 1.6% versus a year earlier, slowing from growth of 2.5% posted in the previous quarter and below projected growth of 2.1%.

Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, said the figures confirmed that economic growth continued to decelerate in Q1, influenced by several challenges. “Tighter financial conditions, difficult external conditions — which offset the boost from pre-election support to households — and increased infrastructure spending, were some of the challenges,” Abadia noted.

Despite the slowdown, Mexico’s economy has now expanded for the tenth consecutive quarter. However, Abadia added that the growth momentum appears sluggish compared to recent trends.

(Reporting by Ricardo Figueroa and Natalia Siniawski; editing by Gabriel Araujo and Jason Neely, and Franklin Paul)