Mexican Economy Continues to Grow in Second Quarter

The Mexican economy experienced its seventh consecutive period of growth during the second quarter, supported by increases in both industrial production and services, according to the National Statistics Institute. Gross domestic product (GDP), a measure of goods and services output, rose by 0.9% in seasonally adjusted terms compared to the previous quarter. Services expanded by 1%, while industrial output and agricultural production each grew by 0.8%.

When compared to the same period last year, second-quarter GDP increased by 3.7% on an unadjusted basis. The Mexican economy has exceeded expectations in the first half of the year, driven by a strong U.S. economy that has increased demand for Mexican exports. Additionally, record remittances have played a crucial role in supporting domestic demand.

The U.S. GDP has also managed to avoid a slowdown, with a 2.4% annualized growth rate in the second quarter following a 2% expansion in the first.

Even though Mexico's second-quarter expansion slightly trails the 1% growth seen in the previous quarter, Capital Economics emerging markets economist Kimberley Sperrfechter believes that the economy may continue to slow down in the upcoming quarters. This is due to the impact of the U.S. economy, Mexico's largest trading partner, on external-facing sectors, as well as the effects of tight fiscal and monetary policies on domestic demand.