Mexico GDP Growth Slows To 3.5% Amid Tertiary Sector Slowdown

Mexican economic growth moderated in the fourth quarter after accelerating in the previous two quarters, largely led by a deceleration in the growth of the tertiary sector, preliminary data from the National Institute of Statistics and Geography, or INEGI, showed on Tuesday.

Gross domestic product advanced an unadjusted 3.5 percent year-over-year in the December quarter, slower than the 4.3 percent rise in the September quarter. That was in line with economists' expectations.

Regarding large economic activities, the primary sector expanded the most, by 6.6 percent annually in the fourth quarter, following only a 3.6 percent increase in the third quarter. 

The annual growth in the tertiary sector softened to 3.4 percent from 4.5 percent. The secondary activity grew at a slightly slower pace of 3.0 percent versus 3.5 percent expansion in the third quarter. 

On a seasonally adjusted basis, GDP advanced 3.6 percent annually in the three months ended December.

Read more: Mexico Trade Surplus Grows To $984 Mln

Quarter-on-quarter, the economic growth was 0.4 percent in the final quarter of 2022, but slower than the previous quarter's 0.9 percent rise. 

In 2022, the Mexican economy grew 3.0 percent compared to 2021. 

The quarterly expansion suggests that the economy held up better than its Latin American peers towards the end of last year, Jason Tuvey, a senior economist at Capital Economics, said.

"But even so, the economy in the midst of a slowdown, which we expect to worsen in the next few quarters," the economist said.

"Our GDP growth forecast for this year, of just 0.8 percent, sits below the consensus."

Read more: Mexico Unemployment Rate Steady At 2.8%

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