The Mexican economy recorded a 3.6% annual growth in Q2 2023, fueled by the services and industrial sectors and the continuation of restrictive monetary policy.
According to the National Institute of Statistics and Geography (INEGI), the Gross Domestic Product (GDP) grew by 3.6% annually in real terms and seasonally adjusted series, as indicated by the Timely Estimate.
This growth was slightly lower than the 3.7% annual expansion observed in the first quarter.
INEGI stated that, by economic activity, secondary activities, which include manufacturing and industry, increased by 3.9% annually in the second quarter, higher than the 2.6% annual growth observed in the Timely Estimate.
Meanwhile, tertiary activities, which include commerce and services, increased by 3.4% annually in the second quarter, lower than the previously observed 4.1%, and primary activities increased by 1.9% annually.
The economy grew between April and June amidst a high-interest rate environment, as the reference rate has been at a record level of 11.25% since March, and the Bank of Mexico (Banxico) estimates that it will remain there for an extended period.
Additionally, the Mexican economy progressed as the Mexican peso strengthened against the dollar, the phenomenon of nearshoring advanced, and the dynamism of the domestic market persisted in a labor market that maintained labor participation.
This growth is critical for Mexico as it indicates a recovery from the economic downturn caused by the COVID-19 pandemic.
The services and industrial sectors being the main drivers of this growth, show the resilience and adaptability of these segments of the economy.
The continuation of restrictive monetary policy by Banxico, while maintaining high interest rates, has played a role in stabilizing the economy.
The strengthening of the peso against the dollar, the advancement of nearshoring, and the sustained dynamism of the domestic market, amidst a labor market that maintains labor participation are all positive indicators for the Mexican economy moving forward.
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