Mexico's growth in gross domestic product (GDP) was revised slightly higher in the third quarter, largely thanks to stronger services activity, statistic agency Inegi said.
The economy grew at an annualized 1.6pc rate in the third quarter, up from 1.5pc growth in the first estimate reported 30 October. Still, growth in the third quarter marked an easing from 2.2pc annual growth reported in the second quarter.
After GDP "slowed significantly" between the fourth quarter of 2023 and the second quarter this year, said Citibanamex, it improved in the third quarter primarily "on the recovery of the agricultural sector, as well as a rebound in services."
Comprising 60pc of the economy, services sector growth was revised to an annualized 2.1pc in the final estimate from 1.9pc in the preliminary estimate.
The rebound in services in the third quarter, up from 1.5pc in the second, might be due to the delayed effects of increased public spending from the Mexican electoral process and completed works from the previous administration, Citibanamex said.
While the industrial component, comprising 32pc of GDP, experienced annualized growth of 0.4pc in the third quarter, that was revised down from the previously estimated 0.5pc growth. Nevertheless, the revised growth rate is slightly higher than the 0.3pc growth observed in the second quarter.
Within the component, the manufacturing subcomponent expanded 0.9pc after contracting 0.6pc in the second quarter. Mining contracted by an annualized 3.3pc in the third quarter after slipping 5.6pc in the second quarter.
Construction slowed to an annual 0.4pc pace of growth in the third quarter, a sharp deceleration from the 7.1pc growth recorded in the second quarter.
Meanwhile, agriculture expanded 3.7pc in the third quarter as seasonal rains ended drought conditions, a solid rebound from a 0.2pc contraction in the second quarter.
Uncertain times ahead
"With today's results, we recognize that there is an upward bias to our 1.3pc GDP growth estimate [for full-year 2024]," said Banorte, and holds its forecast for 2025 growth at 1pc, which is below the government's forecast of between 2pc and 3pc growth for next year.
It added, however, the economy is facing multiple headwinds, the largest being "uncertainty stemming from the victory by [Donald] Trump and the Republicans in the US elections".
Banorte said that while it remains to be seen what policies Trump will enact, based on his campaign rhetoric, "the balance is loaded with the possibility that the effects of those he announces will be negative for our country, especially on trade."
Citibanamex, conversely, sees economic momentum bringing GDP growth to 1.5pc for the full year 2024. But it said slower public spending, sluggish exports and strong uncertainty in private investment would suppress growth in 2025.
By James Young
