MEXICO CITY (Reuters) – Mexico’s economy expanded 1% between April and June from the prior three month period, beating forecasts and marking the third consecutive quarter of growth, a preliminary estimate from national statistics agency INEGI showed on Friday.
Gross domestic product (GDP) was expected to have grown 0.8% in seasonally-adjusted terms in the second quarter, a Reuters poll of analysts found earlier this week.
A breakdown of the GDP figures showed a 1% quarterly jump in the tertiary sector, which covers services, as tourism continued to fuel recovery in Mexico, economists said.
Secondary activities, which include manufacturing, and agricultural output both rose 0.9% in the quarter, the data showed.
Analysts at Capital Economics revised up their 2022 growth forecast for Mexico by 0.5 percentage points to 2.3% following the data, but predicted leaner times lay ahead.
“The big picture is that weakness in the U.S. and tight policy at home will weigh on growth over the coming quarters and Mexico’s recovery will continue to lag behind those in the rest of Latin America,” they said in a research note.
Andres Abadia, Chief LatAm Economist at Pantheon Macroeconomics, said the figures showed Mexico’s economy had proven “resilient.”
“Improving manufacturing activity, still-solid—albeit slowing—remittances from the U.S., and gradually easing inflation pressures, particularly from late Q3 onwards, likely will prevent a protracted downturn over the second half of the year,” he said.
Mexico’s President Andres Manuel Lopez Obrador said earlier this week he was optimistic about the economy, telling reporters he ruled out a recession next year, despite a gloomier outlook for the health of the global economy.
Year on year, the economy expanded 2.1% in the second quarter, the INEGI data showed.
(Reporting by Isabel Woodford Editing by Frank Jack Daniel and Mark Potter)
