Mexico economic system grows 0.9% in Q3 however momentum seen easing on tighter situations By Reuters

(Reuters) -Mexico’s economic system grew 0.9% within the third quarter from the earlier three-month interval, nationwide statistics company INEGI mentioned on Friday, boosted primarily by the first sector and regardless of an ongoing aggressive financial tightening cycle.

The quarterly progress, Mexico’s third in a row, got here in barely beneath economists’ expectations, which stood at 1.0% in a Reuters ballot – the identical stage confirmed by preliminary knowledge revealed by INEGI late final month.

Repeating a pattern seen within the earlier quarter, Latin America’s second-largest economic system posted across-the-board progress within the interval, with main, secondary and tertiary sectors increasing 2%, 0.6% and 1.1%, respectively.

The financial growth comes even because the Financial institution of Mexico pursues an aggressive tightening cycle to rein in stubbornly excessive inflation which has taken rates of interest to a file 10% this yr.

Tighter financial situations, nevertheless, are seen slowing down Mexico’s GDP progress forward, and President Andres Manuel Lopez Obrador has just lately requested the central financial institution to stability combating inflation with the necessity to shield financial progress.

“The economic system has remained resilient to date this yr, which is able to give enough ammunition to Banxico to maintain tightening within the close to time period,” mentioned Andres Abadia, chief Latin America economist at Pantheon Macroeconomics.

“However dangers for the Mexican economic system throughout 2023 stay massively tilted to the draw back.”

Earlier this month, Fitch Rankings mentioned it anticipated Mexico’s gross home product to develop 2.5% in actual phrases in 2022 and 1.4% subsequent yr, whereas the Worldwide Financial Fund (IMF) forecast an growth of two.1% this yr and 1.2% in 2023.

In annual phrases, INEGI mentioned, the nation’s economic system expanded 4.3% within the third quarter in comparison with a yr earlier, beating expectations of 4.1% progress from economists polled by Reuters.

Individually, knowledge confirmed on Friday that Mexico’s financial exercise grew 0.7% in September from August and 5.2% from September of 2021, each additionally forward of market projections.