Economics: Recent economic data anticipate early 2024 slowdown
Preliminary fourth-quarter GDP figures and recently released November and December economic activity indicators point to a slowdown in the early months of 2024 in the face of the contraction trend in manufacturing and the high comparison posed by a rally in construction activity that we estimate peaked in the third quarter of last year.
As reported the week before last, in the fourth quarter of 2023 GDP showed a 2.4% increase on a preliminary basis, the smallest increase of the year. On the demand side, private consumption has sustained its dynamism, benefiting from the increase in wages and other factors such as record levels of remittance inflows and increased consumer credit. However, such spending has been focused on imported goods, and this composition of consumption growth is expected to continue during the first half of the year, something that also has implications for the prospects of domestic producers.
In this week’s Outlook, we analyze the factors that explain economic growth at year’s end and how we project it to perform in 2024, for which we estimate 2.3% growth. And in other news, it was announced that the Board of Governors of the Bank of Mexico (Banxico) decided to maintain the Overnight Interbank Interest Rate at 11.25%.
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