Mexico’s Economy Grows 2% in Early 2024

During the concluding months of President Andrés Manuel López Obrador’s administration, Mexico’s economy expanded by 2%.

This increase was propelled by significant public spending and strategic interest rate reductions by the Bank of Mexico during a phase of declining rates.

The National Institute of Statistics and Geography (Inegi) conducted a preliminary analysis revealing strong growth.

However, it marked a slight slowdown from the previous quarter’s 2.5% gain.

Moreover, it was marginally below the 2.23% predicted by analysts. In sectoral terms, the service-heavy tertiary sector advanced 2.5%.

Meanwhile, the secondary sector, encompassing manufacturing, saw a 1.5% rise, and agriculture experienced a modest growth of 1.3%.

On a quarterly basis, the GDP edged up by 0.2%, a tad above the 0.15% that analysts had anticipated.

Notably, services increased by 0.7%, whereas manufacturing declined by 0.4%, and agriculture grew by 1.1%.

Amid economic changes, the government increased spending on social programs and key projects, aiming for completion before Obrador’s term ends.

Such measures aimed to bolster the economy ahead of the election quiet period.

Simultaneously, the central bank cautiously reduced interest rates in March, vigilantly monitoring service sector price trends to control inflation.

Despite a vigorous economy and a recent surge in inflation in April, analysts foresee a pause in rate cuts in May.

Mexico’s Economy Grows 2% in Early 2024

Alfredo Coutiño, Director for Latin America at Moody’s Analytics, highlighted on X (formerly Twitter) that the economic uplift began in March.

He noted it was due to increased political and electoral spending ahead of the upcoming elections.

Inegi’s prompt GDP estimate offers a snapshot of Mexico’s economic dynamics, reflecting continuous adjustments across sectors.

Quarterly economic performance figures will be released on May 23, 2024, offering key insights for future economic and monetary policies.