Economics: The economy slowed slightly in August
In general, the indicators released in October suggested a slowing of the economy, although some indicators showed improvements over levels of a year earlier.
The Mexican economy grew a seasonally adjusted 1.7% in August compared to the same month a year earlier, according to the IGAE. The improved performance was achieved, once again, largely on the strength of a widening of the service sector, and to a much lesser extent, by an uptick in industrial activity. The latest slight uptick in industrial activity was not far removed from the indicator of a year earlier, when secondary activity was flat, and is also in line with the 0.3% average cumulative monthly increase through the first eight months of 2018.
Those results are also generally in line with Inegi’s preliminary calculation of Mexico’s third quarter, which showed 2.6% growth year on year, a full percentage point higher than the expansion recorded for the same quarter a year earlier. The National Statistics Institute’s producer and consumer confidence indexes continued to register double-digit gains in optimism through September, but those bullish readings have not translated into a similar swelling of private spending.
Consumer inflation concluded September at a six-month high (5.02%), although Banco de México expressed confidence that the rise came in response to transitory factors and projected that the headline rate will resume its downtrend.
Meanwhile, concerns are growing about some of the early decisions being taken by the incoming administration and its allies. These include a series of bills aimed at restructuring government in ways that could undercut the autonomy of key regulatory agencies and that of the central bank, whose mandate they seek to greatly expand to include encouraging job and economic growth in general.
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