Economics: The latest IGAE figures project further slowing in the third quarter and stagnation for 2025
IGAE figures for August show a weak economy with deterioration in the second half of the year, as this index registered zero growth at a seasonally adjusted annual rate for the month, after falling -1.2% in July. This implies that, on average, the economy fell -0.6% at an annual rate in July-August after showing weak growth of 0.6% in the first half of the year. The weakening of the economy is explained by persistent declines in industry, with contractions in mining, water and electricity, construction, and manufacturing, as well as a slowdown in services. This week’s Outlook analyzes the recent IGAE figures and the economic growth outlook for the end of this year and the next one. We believe Mexico's outlook is for a stagnant economy in 2025 and weak growth in 2026. We project GDP growth of 0.3% for 2025 and 1.3% for 2026.
Among the week's indicators, it was reported that consumer inflation for the first half of October fell to 3.63% yoy vs. 3.74% for the same fortnight of September. This movement was once again due to a decline in non-core inflation to 1.58%, down from 2.03%, caused by a sharp drop in fruit and vegetable prices, while core inflation remained virtually unchanged at 4.24% vs. 4.26% in the first half of September. The core component has not slowed down and is expected to rise moderately in the coming months, making it likely that this component will end the year above 4%.
It was also reported that in August retail sales increased by 0.6% at a monthly rate and 3.1% at an annual rate seasonally adjusted, while wholesale sales increased by 1.2% monthly and fell -4.3% annually. It is noteworthy that the monthly variation in wholesale sales was positive for the first time since July 2024. However, its cumulative variation for the year remains negative.
Now read on...
Register to sample a report