Mexico’s economy grew at a better-than-expected rate in the first quarter of the year, despite challenging external and financial conditions. Preliminary estimates from Mexico’s national statistics agency INEGI showed that the country’s economy expanded by 0.2% quarter-on-quarter, slightly higher than the 0.0% predicted by economists. This growth was attributed to a downturn in the primary sector, which was partially offset by growth in services.
However, on a yearly basis, Mexico’s economy grew at a slower pace of 1.6%, compared to the expected growth of 2.1%. Andres Abadia, Chief Latin America Economist at Pantheon Macroeconomics, noted that this deceleration in economic growth was influenced by various challenges such as tighter financial conditions, difficult external conditions, and increased infrastructure spending. Despite these challenges, Mexico’s economy has now expanded for the tenth consecutive quarter.
Abadia mentioned that while the slowdown is concerning, it is not necessarily indicative of long-term economic trends. He pointed out that there are still opportunities for growth and investment in sectors such as technology and renewable energy. Moreover, Mexico has been able to maintain its position as a key player in global trade and investment flows due to its strategic location and strong business environment.
Overall, while Mexico’s first quarter economic performance was weaker than expected due to external and financial factors, there are still opportunities for growth and investment in certain sectors of the economy. The government can continue to focus on improving infrastructure and promoting innovation to support long-term economic development and sustainability.
In conclusion, despite facing various challenges such as tighter financial conditions and difficult external factors, Mexico’s economy continued to expand for the tenth consecutive quarter in Q1 2021. While this growth was lower than anticipated due to external factors like global trade uncertainty and reduced international demand for commodities like oil and gas production – it still represents a positive sign for investors looking for long term stability in Latin America region.
Mexico’s chief economist noted that there are still opportunities for growth and investment in sectors like technology or renewable energy but also emphasized that government needs to focus on improving infrastructure investments as well as promoting innovation to support long term development plans.
Despite these challenges faced by Mexico’s economy during Q1 2021; it remains resilient with ten quarters of consecutive expansion