The Mexican economy has expanded better than forecast in the first quarter, according to the preliminary estimates of Mexican statistical institute. Mexico’s economic growth accelerated seasonally adjusted 0.8% q/q and 2.9% y/y in Q1 2016. Economic activity rebound in Mexico has been widespread, note Wells Fargo. The primary sector grew 1.2% q/q and 3% y/y in Q1 2016.
Meanwhile, Mexico’s secondary sector, which is mostly the industrial sector, grew 1.5% q/q and 2.2% y/y. The service sector expanded 0.8% q/q and 3.7% y/y. However, the economic activity is unlikely to further weaken in 2016, according to the analysts, noted Wells Fargo.
Whether the Mexican economy’s Q1 performance will be sustainable will rely on the US economic rebound in 2016, added Wells Fargo. Deceleration of automobile demand in the US is expected to restrict Mexico’s industrial sector and overall economic growth, added Fells Fargo. Moreover, the Mexican statistical institute has shown that the actual data might be altered when the actual data for the first quarter is released. Meanwhile, seasonal issues might be impacting the Mexican economy’s performance in Q1 2016, according to Wells Fargo.
