Mexico’s economy grew at its highest rate in over two years and a half, by 1,1%, in the third quarter 2024 compared with the prior quarter. This is according to INEGI – the national statistics agency of Mexico.
The growth rate slightly exceeded the 1,0% predicted by economists surveyed in Reuters’ survey, indicating that Latin America’s second largest economy is gaining momentum despite its challenges.
Primary sector shows strong recovery
Primary sector, which includes agriculture, mining, and fishing, led the recovery in Q3 with an impressive growth of 4.9%, rebounding from a contraction of 0.2% in the prior quarter.
The sector is a key part of the economy and this resurgence highlights its importance, especially in light of external factors such as the volatile weather conditions or fluctuating commodity prices.
The manufacturing sector, which is the second largest, increased by 0.9% in the third quarter, up from 0.3% during the previous three months.
In the tertiary industry, which includes services, growth was also 1.1%. This is a marked improvement over its 0.1% marginal increase from the previous quarter.
These sectors are a reflection of a well-rounded recovery in the economy, driven by more robust industrial and service activity.
Mixed signals and stabilization of annual growth
The annual growth rate slowed from the 2.2% recorded in the prior quarter to just 1.6%.
This figure, however, exceeded the 1,5% predicted in the Reuters survey, highlighting the gradual stabilization of the Mexican economy.
The economic activity in September 2024 rose by 0.3% over the previous year, a slight slowdown from the revised 0.7% increase recorded in August, and below market expectations for 0.5%.
The growth of services slowed down to 0.7%. Industrial output fell by 0.4%. This was mainly due to declines in manufacturing and mining.
However, the agricultural sector grew by 1,2% in September, a recovery from August’s 2.1% drop.
The monthly economic activity in September increased by 0.2%, exceeding the market expectation of 0.1%. This follows a decline of 0.2% in August.
Strategic rate reductions by the central bank
Banxico has reduced the benchmark rate of interest by 25 basis point to 10,25% in an effort to promote growth.
This unanimous decision shows the bank’s belief in its ability to ease inflation and stimulate consumer and investment spending.
Banxico has cut its rates for the first time in many years. This shows how carefully it balances economic growth with price stability.
The central bank can now consider further rate reductions, which could boost domestic demand, and improve Mexico’s trajectory of growth.
Mexico’s growth in Q3 is a good sign for the economy. Agriculture, manufacturing and services all performed well. Although annual growth rates are down, resilience and supportive policies by Banxico will provide the foundation for a continued recovery.
Mexico’s combination of sectoral rebounds and rate strategic adjustments will allow it to make steady progress over the next few months, making it an important player in Latin America’s economic recovery.
The post Mexico’s GDP grows at its highest rate in two years, with a 1.1% increase in Q3 2020 may be updated as new information becomes available.
This site is for entertainment only. Click here to read more
