Mexico: Decline in economic activity softens in January
Latest reading: The monthly indicator for economic activity (IGAE) fell 0.2% month-on-month in seasonally adjusted terms in January (December: -1.1% mom). The smaller drop was due to improved readings for the primary, industrial and services sectors.
On an annual basis, economic activity fell at a softer rate of 0.1% in January (December: -0.4% yoy). Meanwhile, annual average economic activity growth fell to 1.2% in January (December: +1.4%), pointing to a worsening trend.
Panelist insight: On the reading and outlook, Itaú Unibanco analysts said:
“[The] results confirm our view that the economy is continuing to decelerate at the start of 2025. Based on the data […], we are forecasting a 0.5% QoQ SA contraction in the first quarter, indicating a technical recession following the 0.6% decline in 4Q24. Looking ahead, the economic activity could improve if uncertainties regarding trade policy disappear, which might support private investment and internationally related sectors.”