The second-largest economy in Latin America continues its growth streak for eight consecutive quarters, driven by increased exports to the United States and consumer spending.
Mexico’s economy reaffirms its strength by advancing 1.1% during the third quarter compared to the previous period, according to the National Institute of Geography and Statistics (Inegi). The Gross Domestic Product (GDP) has seen eight quarters of growth, propelled by increased exports to the United States and consumer spending. The figure released this Friday surpasses even Inegi’s preliminary estimates, which placed Mexican GDP growth at 0.9%. In its year-on-year variation, the country’s GDP maintained a growth rate of 3.3%.
The increase, above market expectations, occurred due to quarterly advances in all sectors. From July to September, agricultural activities recorded the most significant growth at 2.6%. The other driving force of the economy during the third quarter of 2023 was the industry, with a growth rate of 1.3%, while trade and services, contributing two-thirds of the GDP, saw an increase of 0.9%. In the accumulated nine months of the year, primary activities show a growth of 2.87%, secondary activities of 3.74%, and tertiary activities of 3.15%.
Gabriela Siller, director of Banco Base, warns that growth in the construction sector boosted the industrial sector from July to September. The analyst predicts that if GDP increases by 0.86% in the last quarter, the country’s economy will close with a growth rate of 3.43%. In the same vein, Citibanamex economists project that Mexico’s GDP will expand by 3.4% this year and 2.1% in 2024. Financial institutions have consistently adjusted their forecasts upward for Mexico in recent months, driven by economic dynamism, remittance injections, investment inflows, and the growing opportunity presented by nearshoring for the country.
The strength of the Latin American economy aligns with that of the U.S. economy, which has dispelled fears of a possible recession, growing by 1.2% during the third quarter of 2023. The robustness of the U.S. labor market and consumer spending has defied all expectations, and the world’s largest economy has not only avoided slowing down but has accelerated its growth in the third quarter to its highest pace since 2021.
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