Mexico’s growth slows in fourth quarter

1/29/2016 Financial Times

drawing bar chartAfter an encouraging third quarter, Mexico’s economy lost steam again as the weak peso failed to give a much hoped for boost to the country’s manufacturing sector and low crude prices continued to batter the energy sector.

Gross domestic product grew 0.6 per cent in the last three months of 2015 from the previous quarter, according to preliminary figures released by country’s National Statistics Institute on Friday.

The pace of expansion — in line with market expectations — is a shade weaker than the 0.8 per cent rate recorded in the third quarter.

Overall, Mexico grew 2.5 per cent in 2015, up from 2.1 per cent in 2014.

After a rocky start to the year, there was hope that Latin America’s number two economy was regaining its vigour following solid third quarter growth. But the strong gains being made in the services sector, powered by the pick up in consumer spending, are still being offset by the slump in the energy sector.

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Mexico’s Growth Outlook Raised

12/1/2015 The Wall Street Journal

mexican pesosMEXICO CITY—Private economists surveyed by the Bank of Mexico raised their expectations for the country’s economic growth this year, reversing a series of forecast cuts in recent months, as domestic demand is showing strong signs of recovery.

Mexico’s economy is likely to grow 2.44% this year, according to the median estimate of 37 economists polled by the central bank during November. The growth estimate was 2.29% in October and had fallen steadily for most of the year.

The rise in forecasts comes after the Mexican economy expanded at an annualized rate of 3% in the third quarter, the fastest in two years and well above expectations, as employment and wage growth along with record-low inflation fueled household consumption and the service sector.

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Latin America’s economic power rankings are shifting, and Mexico is emerging as a winner

11/17/2015 The Yucatan Times

1363368470_a0fdfdf230_zThe Mexican economy isn’t surging, but it’s surviving — and that’s a success in a year of tough economic times for the region. Low commodity prices, plunging currencies and a stock market sell off across emerging markets have hit Latin America particularly hard this year.

But Mexico’s economy is growing, unemployment is falling and its debt was upgraded earlier this year. That’s exactly the opposite situation in Brazil, which had been the region’s biggest success story until recently. Brazil’s economic size, performance and potential surpassed all others in the region. But now its economy is in recession, its debt has been downgraded to junk status and the future outlook appears dim.

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Mexico Shows Resilience In a Complex Global Environment

International Monetary Fund 11/18/2015

5504964078_df874cacb5_zMexico’s economy continues to grow at a moderate pace, despite an array of external challenges, including a collapse in oil prices and heightened volatility in international financial markets, the IMF said in its annual assessment of the Mexican economy.

Economic activity has remained resilient despite the difficult external environment. Growth is expected to reach 2.2 percent in 2015, and accelerate to 2.5 percent in 2016, thanks to stronger exports to the United States and robust domestic demand. The unemployment rate fell to a post-crisis low of 4¼ percent in the second half of 2015.

The rise in global financial market volatility and a portfolio shift away from emerging markets caused a sharp depreciation of the peso vis-à-vis the U.S. dollar over the past year. Nonetheless, inflation remains low, and the yields on domestic currency bonds have been relatively stable.

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Mexico industrial output up in September for 4th month

11/11/2015 Reuters

mexican pesos

Nov 11 (Reuters) – Mexican industrial output expanded in September for the fourth month in a row as stronger mining, utilities and construction offset a decline in factory output.

Industrial output in Latin America’s No. 2 economy rose 0.4 percent compared to August, the national statistics office said on Wednesday, just above analysts’ expectations and a 0.2 percent rate in August.

The industrial output’s factory output component shrank 0.2 percent in September from August, its weakest since May. Mexico sends nearly 80 percent of its exports, mostly factory goods, to the United States.

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Worst Earnings in Three Years Fail to Deter Mexico Investors

11/5/2015 Bloomberg
Share market prices shown on anMexico’s worst earnings in 13 quarters aren’t deterring investors betting that rising sales are a precursor to economic growth next year.

The IPC Index has climbed 6.2 percent in the last month, the second-best performance among the benchmark gauges in six Latin American markets. That’s because shareholders are focusing on the bigger picture: a resurgence in the domestic economy, Grupo Financiero Santander Mexico SAB and Bank of America Corp. say.

Average sales for Mexico’s companies currently on the IPC rose to the second-highest level since 2012 in the third quarter, according to data compiled by Bloomberg. Mexican consumers are spending more as wages rise and inflation drops to record lows because of new laws that reduced phone and TV service prices.

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Mexico vs. China: How two manufacturing hubs stack up

Quartz 11/2/2015

drawing bar chartOn Oct. 27, the state-owned China Communications Construction Company (CCCC) signed a preliminary agreement with the Mexican state of Jalisco to build an industrial park that would potentially house dozens of Chinese manufacturers, Reuters reported.

In 2000, workers in Mexico’s manufacturing sector earned nearly 60% more than their Chinese counterparts, according to the Boston Consulting Group. Now they earn 11% less.

Mexico is also much closer to the US, the world’s biggest consumer market and one of the brighter spots in the global economy. Jalisco’s governor, Aristóteles Sandoval, says the CCCC project (link in Spanish) would turn his state into a gateway for China to the rest of his country, and to the US.

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