Mexican Economy Expands Less Than Expected in First Quarter

Mexico’s economy grew less than expected in the first quarter because of weak domestic demand and anemic expansion of industrial activity, and the figures suggest the government could significantly cut back its 2014 growth estimate later on Friday.

Latin America’s No. 2 economy grew 0.3 per cent in the first quarter from the last three months of 2013, when it expanded by a downwardly revised 0.13 per cent, the national statistics institute said on Friday.

A Reuters poll had forecast growth of 0.46 per cent.

More government spending on infrastructure this year has helped pull the construction sector back from a sharp contraction in 2013, but exports stagnated, and factory output dipped in March.

“This confirms that the economic slowdown that began last year spread into this year,” said Delia Paredes, an economist at Banorte in Mexico City.

“Still, we are now starting to see some signs that the economy is rebounding,” she said, pointing to a recent pick up in consumer confidence and stronger exports.

Industrial output grew less than 0.1 per cent in the first quarter compared with the previous period, the data showed.

A separate report from the statistics institute showed economic activity in March fell 0.8 per cent from February , contracting at the fastest monthly pace since December 2012.

Mexico exports mostly manufactured goods, and nearly 80 per cent of exports go to the United States, where a harsh winter hurt the economy in the first quarter.

Domestic demand has also been weak as new taxes weighed on growth in the first quarter. Mexican unemployment rose to its highest level in more than a year in March, and retail sales slipped during the first two months of the year.

Mexico’s central bank held its main interest rate steady last month at 3.5 per cent as inflation eased back from a January spike. Lower price pressures give policy makers room to leave interest rates low to support the economy.

At an annual pace, the economy expanded 1.8 per cent in the first quarter from a year earlier, below expectations for 2 per cent growth but up from a 0.7 per cent rise in the fourth quarter of last year.

At a media conference set for 10 a.m. (1500 GMT), Mexico’s finance ministry is expected to cut its growth forecast of 3.9 per cent for 2014. Private sector economists have already revised down their outlook to around 3 per cent for 2014.

Mexico’s central bank on Wednesday slashed its 2014 growth forecast to between 2.3 per cent and 3.3 per cent from a previous estimate of 3 per cent to 4 per cent.

Mexico’s economy grew less than expected in the first quarter because of weak domestic demand and anemic expansion of industrial activity, and the figures . . .

Follow Us On Google News | Get Our Newsletter



Trending News on PVDN

  • Where do foreigners come from and where do they live in MexicoMexico City Protest on July 5 Challenges Gentrification and Airbnb’s Impact on Housing Residents of Roma and Condesa will gather at Parque México on July 5 to protest gentrification, rising rents, and Airbnb’s effect on local housing. This Saturday, July 5, Mexico City will witness its first organized citizen protest against gentrification—a peaceful but urgent gathering taking place at 3:30 p.m. at the Lindbergh Forum in Parque México,…
  • raw-sewage-playa-los-muertos-puerto-vallartaMore Raw Sewage Dumping at Playa Los Muertos Appear to Come From Local Hotel Business owners in Puerto Vallarta are demanding action after raw sewage was discovered leaking onto Playa Los Muertos, raising public health and tourism concerns. A raw sewage leak at Playa Los Muertos in Puerto Vallarta has sparked outrage among local tourist service providers and business owners, who say the contamination is driving away visitors and…
  • puerto-vallarta-rainfall-hurricane-flossie-july-2025Puerto Vallarta braces for torrential rains as Hurricane Flossie gains strength Puerto Vallarta faces a high risk of flooding as Hurricane Flossie intensifies in the Pacific. Torrential rains and overwhelmed drainage systems pose major challenges for the city. Puerto Vallarta, a city wedged between the Sierra Madre mountains and the Pacific Ocean, is no stranger to dramatic weather shifts—but this summer, the skies are testing the…
  • puerto vallarta lettersPuerto Vallarta needs a new image to create meaningful reasons for travelers to visit Business leaders at Jalisco Tourism Secretariat forums stressed the need for renewing Puerto Vallarta image and diversifying attractions to appeal to national and international markets. Local business leaders and tourism specialists agreed this week that Puerto Vallarta needs a fresh look and a broader range of attractions to compete at home and abroad. In a…
  • protests3Mexico City Protests: There is a fine line between anti-gentrification and xenophobia The line between anti-gentrification and racism is clear if you choose to see it: genuine activism targets policy and practice, not nationality or ethnicity. I have lived in Mexico for two decades, and I have never witnessed the level of anti-American sentiment that exists today. All of it is tied to the buzzword "gentrification," a…
  • José Luis Velázquez RodríguezSEAPAL Official Reported Missing in Puerto Vallarta Authorities in Puerto Vallarta have launched a search for José Luis Velázquez Rodríguez, SEAPAL's head of transparency, who has been missing since June 30. Family and officials are urging the public to report any information. Local authorities and civil protection units have launched a search operation for José Luis Velázquez Rodríguez, head of the Transparency…
  • puerto-vallarta-police-chase-bahia-de-banderasPuerto Vallarta police chase ends in deadly collision in Bahía de Banderas A Puerto Vallarta police chase along Highway 200 ended in a deadly collision in Bahía de Banderas, leaving two people dead. A high-speed chase that began in Puerto Vallarta, Jalisco, and ended in Bahía de Banderas, Nayarit, left at least two people dead and raised new questions about police engagement and road safety in the…
  • mexico city real estateGentrification in Mexico City is not the reason for the high cost of housing City housing shortage, not gentrification, drives prices skyward as planning lags behind demand and foreigner influence remains minimal. High real estate costs in Mexico City stem from a deep and persistent housing shortage—exacerbated by land constraints, tangled regulations and speculative investment—rather than by the presence of foreign residents. Despite headlines blaming “gentrification,” foreign-born residents make…
  • protestProtest graffiti and smashed windows mars anti-gentrification rally in Mexico City Residents and activists joined an anti-gentrification rally in Mexico Park, but the anti-gentrification rally Mexico Park turned destructive as masked youths defaced local shops and broke windows. A rally against gentrification held yesterday in Mexico City’s Parque México drew residents from Juárez, Roma, Condesa and Hipódromo alongside local activists. Organizers billed it as the city’s…
  • no-damage-jalisco-hurricane-flossieNo Damage Reported in Jalisco as Hurricane Flossie Moves Away While Mexico's Weather Service predicted heavy rains, Hurricane Flossie causes no damage along Jalisco’s coast. The Category 3 storm brings light rain and moderate waves as it moves away from the region. The coasts of Jalisco remain calm and largely unaffected following the passage of Hurricane Flossie, a powerful Category 3 storm that is now…
Scroll to Top