Mexico’s economic activity experienced a robust rebound in April, indicating a solid start to the second quarter.
This positive performance was accompanied by decelerating inflation and a robust labor market.
The Indicador Global de la Actividad Económica (IGAE), a key indicator for gross domestic product (GDP), recorded a 0.8% increase compared to the previous month.
This surpassed the average forecast of 0.5% predicted by analysts in a Bloomberg survey.
The report indicated a reversal of March’s 0.2% decline, with a year-on-year increase of 2.5%.
The primary sector led the gains, rising by 1.2% from the previous month, while the services sector also showed strength with a 1% increase.
The industrial sector experienced a modest rise of 0.4%, partially recovering from the 0.9% decline in March.
The better-than-expected growth aligns with recent data showing a slowdown in inflation.
The strong performance of the services sector suggests robust consumption, indicating the economy is well-positioned to withstand a potential slowdown in the US economy, according to Alberto Rojas, a senior emerging markets economist at Credit Suisse Group AG.
Rojas stated, “Mexico’s economy continues to surpass expectations, and the likelihood of a smooth landing is increasing.”
The strong start to the year indicates that second-quarter activity is expected to rise by approximately 0.8% compared to the previous quarter, according to Andres Abadia, chief economist for Latin America at Pantheon Macroeconomics.