Economics: GDP growth remained solid through 2Q, with robust secondary sector and GFI data

MEXICO - Report 05 Sep 2023 by Mauricio González and Francisco González

GDP growth remained solid through the first half of the year even as the second quarter expansion proved to be marginally less pronounced than analysts had projected and Inegi had calculated in the preliminary estimates it released at the beginning of August. First quarter GDP was also revised marginally lower.

However, a series of key numbers proved to be significantly more positive than preliminary estimates had suggested. The industrial sector (+4.0%) turned in a considerably stronger performance than anticipated even though it fell somewhat shy of its performance of a year earlier. Meanwhile, gross fixed capital formation notably accelerated its uptrend in May and June in response to its machinery and equipment and construction components.

Banco de México added to the picture this past Wednesday in its quarterly report as it raised its 2023 growth forecast to 3.0%, up from 2.3% in its previous report. It also upwardly revised its 2024 economic growth forecast 5bp to 2.1% while citing a strong labor market and domestic spending as contributing to the economy's "resiliency." In this week's Economic Outlook, we provide a summary of the economic data and developments of the past month.

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