Economics: The Mexican economy continues to lose steam; Banxico lowers the reference rate by 25 bp
Indicators published over the course of September have shown the Mexican economy accentuating its slowdown. Industrial sector growth trickled to a mere +0.6% in July, as did manufacturing, while that of aggregate supply and demand sputtered to just shy of a single percentage point in the second quarter. And as of July, investment growth has slowed to less than half its slackened pace of the first half of the year. The labor indicators with the greatest impact on the population’s consumption have also lost considerable steam, especially on the level of employment, at the same time as private consumption has slowed and household spending on services has decelerated.
Given the context described in this week’s monthly review, we project GDP will grow 1.4% this year and within a range of 0%-1% in 2025, depending on what the new government announces in the coming months.
In this week’s issue we also report on the key indicators released over the past week, including the IGAE for July and both the latest inflation data and Banxico’s decision to implement a quarter-point rate cut.
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