Mexico: Expenditure-based national accounts confirm solid Q3
In annual terms, expenditure-based national accounts data released on 19 December by the Statistical Institute confirmed resilient trade-driven dynamics in the third quarter. The economy grew 2.5% year-on-year, a tad below the second-quarter reading (Q2: +2.6 year-on-year) but in line with analysts’ expectations. Additionally, aggregate supply and demand climbed 3.6% from a year earlier (Q2: +3.8% yoy). In quarter-on-quarter terms, the economy rebounded on a seasonally-adjusted basis (Q3: +0.8 quarter-on-quarter s.a.; Q2: -0.1% qoq s.a.).
A comprehensive breakdown revealed that domestic demand hobbled through the quarter. Household spending decelerated to 2.2% annually (Q2: +2.9% yoy), likely dragged on by slower remittances growth and an uptick in inflation. Moreover, government spending lost momentum, expanding 1.0% (Q2: +3.1 yoy). Fixed investment, meanwhile, logged a meager 0.3% increase from a year earlier (Q2: +3.3% yoy) in light of waning industrial-sector metrics and despite a short-lived bounce in economic sentiment on the heels of Andrés Manuel López Obrador‘s (AMLO) resounding 1 July election victory.
On the external front, export growth was buoyant amid upbeat stateside metrics and despite the post-election strengthening of the peso, clocking in at 8.8% (Q2: +8.2% yoy). On the other hand, import growth slowed from a quarter earlier (Q3: +6.3% yoy; Q2: +7.2% yoy). Taken together, the external sector contributed 0.7 percentage points to the headline reading, up from a marginal contribution in the second quarter.