By Aida Pelaez-Fernandez
MEXICO, Oct 30 (Reuters) – Mexico’s economy grew 0.9% in the third quarter, slowing from the previous three months but beating analysts’ forecasts, a preliminary estimate from national statistics agency INEGI showed on Friday.
Mexico’s central bank, Banxico, is due to announce its monetary policy decision next week. Analysts said continued economic growth, though more moderate, has weakened the case for monetary easing.
Gross domestic product in Latin America’s second-largest economy grew 0.9% in the three months through September, down from 1.4% growth in April-June. Economists in a Reuters poll expected a 0.7% increase in the third quarter.
“Mexico’s economy maintained solid momentum in Q3, confirming that the recovery extends beyond the temporary boost from the FIFA World Cup,” said Andres Abadia, chief economist for Latin America at Pantheon Macroeconomics.
A stronger-than-expected economic recovery is reinforcing expectations that Banxico will keep its benchmark interest rate at 6.50% through the first half of 2027, Abadia added in a note.
The economy was mainly driven by a 1.1% expansion in tertiary activities, which cover services, and a 0.8% increase in the secondary sector, which includes manufacturing and construction.
Primary activities – which include farming, fishing and mining – declined 0.4% from the prior three-month period.
Compared with the third quarter a year earlier, the Mexican economy grew 3.2%. That is above a 2.5% year-on-year increase expected by economists.
“The tone of Banxico’s communications at next week’s meeting will be much less dovish than those accompanying the September meeting,” Capital Economics analysts said.
(Reporting by Aida Pelaez-Fernandez and Ricardo Figueroa; Editing by Anthony Esposito and Sanjeev Miglani)
Comments