Mexican economic growth sped up in May

RIO DE JANEIRO, BRAZIL – Mexican economic growth accelerated in May, boosted by primary activities such as farming, fishing and forestry, as well as tertiary activities, which include services and retail, data from the national statistics agency INEGI showed on Tuesday, July 27.

Economic activity grew 0.6% in May from April in seasonally-adjusted terms, as primary activities increased 8.4% and tertiary activities rose 0.8%, according to the data.

That compares to growth of 0.2% in April from March.

“Activity in April-May was driven by the strong performance of the labor-intensive tertiary/services sectors and held back by the poor performance of the secondary sector,” Goldman Sachs economist Alberto Ramos said in a research report.

Secondary activities, which encompass factory output, mining, construction and energy generation, transmission and distribution, rose 0.1% in May from April.

Economic activity expanded 25.1% in May versus a year earlier, according to the non-seasonally-adjusted figures.

Ramos said a further easing of social distancing protocols, positive spillovers from solid U.S. economic growth, stronger terms of trade, and the lagged effects of monetary policy should support Mexico’s recovery from the coronavirus pandemic.

Hammered by the restrictions brought about by the pandemic, Latin America’s second-largest economy shrank 8.5% in 2020, its worst performance since 1932.

The International Monetary Fund updated its projections for Mexico’s economic performance for 2021 and 2022, forecasting that growth would be 6.3% this year and 4.2% next year.

INEGI will publish preliminary GDP data for the second quarter on Friday (30).

Source: Reuters