Economics: GDP outperforms in 3Q even as evidence grows of slowing ahead that could be aggravated by the toll Hurricane Otis is taking
Mexico’s economy expanded in the third quarter an annual 3.3% according to Inegi’s preliminary calculations. That headline result was better than expected but marked a slowing compared to the 3.7% recorded through the first half of the year and pointed toward the likelihood of further slowing in the face of headwinds such as the impact of stagnant industrial activity in the US and a softening of consumption and demand for services in the domestic market.
Those developments were already visible. Although a continuing acceleration of construction activity fueled by the government’s large-scale infrastructure projects made the industrial sector the largest growth contributor last quarter even as manufacturing stalled, the services sector turned in its weakest performance in over a year as private consumption, lodging and food preparation and leisure services slowed.
We can expect an extension of these trends in the coming months, and they will be further aggravated by the impact of Hurricane Otis on Acapulco and the surrounding municipalities, including its broader ramifications for the regional economy and for the tourism sector elsewhere around the country. In this week’s Economic Outlook we analyze the latest quarter’s GDP results, as well as the recent performance of the economy of Acapulco and the state of Guerrero in order to begin to estimate the extent of impact that Hurricane Otis could have.
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