Mexico’s Economy Defies Expectations in Q1 2021, Growing for Tenth Consecutive Quarter but Slowing Down Compared to Previous Period

According to preliminary estimates from Mexico’s national statistics agency, INEGI, the country’s economy performed better than expected in the first quarter of the year compared to the previous three months. The economy experienced a 0.2% growth in gross domestic product (GDP) on a quarter-on-quarter basis, slightly exceeding the 0.0% that economists had predicted. This growth was primarily driven by an increase in services, although there was a decline in the primary sector.

However, on a yearly basis, Mexico’s economy slowed down, expanding by only 1.6% compared to the same period last year. This growth rate was lower than the 2.5% growth seen in the previous quarter and below the expected 2.1% growth. Chief Latin America Economist at Pantheon Macroeconomics, Andres Abadia, attributed this slowdown to various challenges including tighter financial conditions, difficult external conditions, and increased infrastructure spending. These factors contributed to the overall deceleration of economic growth in the first quarter.

Despite this slowdown, Mexico’s economy has now grown for the tenth consecutive quarter. Abadia noted that while there is still growth momentum, it appears to be weaker compared to recent trends. The figures indicate that Mexico’s economic growth continued to face challenges in the first quarter, but the country remains on a path of expansion as it continues its impressive streak of steady economic progress.

In summary, while Mexico’s economy faced some challenges in terms of slower growth rates compared to expectations and difficult external conditions during Q1 2021, it still managed to grow for ten consecutive quarters with an overall GDP increase of 10%.