Mexico’s GDP slowed in Q2; grew 1%

Mexico City. The Mexican economy lost speed and grew by one percent in the second quarter of 2024 compared to the same period in 2023, reflecting a slowdown, as the first quarter’s growth was 1.9 percent annually, according to figures from the National Institute of Statistics and Geography (Inegi).

On a quarterly basis, Mexico’s gross domestic product (GDP) grew 0.2 percent in real terms compared to the first quarter of 2024, with seasonally adjusted figures to make the figures more comparable.

This means that during the first six months of the year, growth of 1.4 percent was recorded compared to the first half of last year, below the previous estimate of 1.9 percent.

By sector, at a quarterly rate and with seasonally adjusted series, the gross domestic product of services and industry increased by 0.1 and 0.3 percent, respectively, while agriculture fell by 0.2 percent.

In annual terms, the services sector was the most dynamic with a growth of 1.5 percent, followed by the industrial sector with 0.4 percent, while the agricultural sector had a fall of 2.5 percent.

According to original GDP figures, the second quarter of the year saw growth of 2.1 percent. By sector, services showed an increase of 2.5 percent, followed by the industrial sector with 1.8 percent and a fall of 2.8 percent in agriculture.

Thus, in the first half of the year, Mexico’s economy grew 1.8 percent compared to the same period in 2023.

“There were no surprises in the growth of the economy in the second quarter. Once the elections of June 2 were over, the Mexican economy suffered a shock due to the absence of electoral spending and the cancellation of temporary jobs created during the electoral process began. This is the traditional contraction phase of the political cycle of the economy.

“To this we must add the blackout suffered by public investment in infrastructure, which also drags down private investment in construction. Added to this is the beginning of layoffs in the bureaucracy at the end of the six-year term. Nothing new in the last four decades,” explained Alfredo Coutiño, director for Latin America of Moody’s Analytics, an independent firm of the sovereign risk firm.

The IGAE stagnated

In June 2024 and with seasonally adjusted figures, the global economic activity indicator (IGAE), which allows us to know and monitor the evolution of the real sector of the economy in the short term, did not show any variation at a monthly rate.

Inegi estimated that at an annual rate and with seasonally adjusted series, the IGAE increased 1.1 percent in real terms.

By component, in the sixth month of 2024 and with seasonally adjusted figures, secondary activities (industry) grew 0.4 percent monthly in June. Tertiary activities (services) fell 0.2 percent and primary activities (agriculture), 0.4 percent.

By major activity groups, tertiary activities rose 1.5 percent annually and secondary activities 0.4 percent. Primary activities decreased 2.5 percent in June compared to the same month in 2023.