Mexico’s economy showed resilience in the second half of 2024 with a GDP increase of 0.2% over the previous quarter.
The modest increase is in line with preliminary estimates, and comes after a 0.1% decrease from the previous period.
The annual rate of growth was more impressive, however, as it increased by 2.1% in Q2. This is slightly less than the original 2.2% estimate, but still a significant acceleration when compared to the 1.5% increase seen in the prior quarter.
The Instituto Nacional de Estadistica y Geografia, or INEGI, has revealed that the slowest growth rate was recorded for the second quarter in a row.
The service sector’s contribution to the GDP was minimal, at 0.1%, compared with 0.5% growth in Q1. However, the industrial sector showed an improvement by growing 0.3%, after experiencing a contraction of -0.5% in the prior quarter.
The primary activities including agricultural and extractive industry faced ongoing challenges, with a contraction of -0.2%.
Sector-wise performance
Service sector growth, which is a major driver of the economy, has seen a dramatic slowdown. In Q2, it was only 0.1%, down from 0.5%.
The decline in demand is a sign of weakened consumer spending. Reduced consumer confidence, increasing living costs and economic uncertainty may all be contributing factors.
The industrial sector, on the other hand, showed a promising rebound with 0.3% of growth after a contraction of -0.5%. The positive change is due to increased manufacturing and construction activities.
Industrial sector recovery is a result of a response to the market’s conditions. This was driven by increasing internal investments, and booming demand for manufactured products.
Primary sector including agricultural and extractive industry experienced an even more dramatic contraction, -0.2%.
The agriculture sector, in particular suffered a sharp decline (-4.9%), reflecting its vulnerability to weather-related disruptions, interruptions of the supply chain, and fluctuations in global export demand. The urgent need to implement targeted measures is highlighted by this.
What was the performance?
Mexico’s economy is resilient, and despite quarterly fluctuations in GDP, it grew 2.1% over the previous year during Q2 of 2024.
The 0.6% decline in annual activity in June 2024, primarily due to a 2.9% decrease in primary activities has raised concern.
A decline in the mining and industrial sector underscores the importance of strategic action to improve competitiveness, and tackle specific challenges.
In Q2, the tertiary sector, which includes wholesale and retail, experienced a decline of 0.4%, mainly due to lowered output.
The overall decline in retail and wholesale trade is a reflection of weak market and consumer demand.
The divergent performance of the service sector indicates a changing dynamic and the need for tailor-made policies to boost innovation and productivity.
The post Mexico’s Economy Sees 2,1% Annual Growth Despite Quarterly Variations may be updated as new information becomes available
