Mexico | GDP grew 0.9% QoQ in 2Q23 driven by the tertiary sector and industry

With the preliminary data for 2Q23, GDP grew 3.6% in 1H23 (vs 1H22), reaching a level 2.7% above that reported in pre-pandemic (4Q19)

Key points

Key points:
The growth of the tertiary sector was favored by the dynamism of retail sales and services during June, due to the displacement of the discount week (Hot Sale) towards the sixth month of the year (for the first time since its launch).
Regarding manufacturing, the automotive sector has shown greater resilience than anticipated, still registering positive variations in production levels, while other manufacturing segments are already showing contractions (chemicals, basic metals, food industry).
We anticipate the resilience of consumption will extend towards 2H23, given the gains in real wages and formal employment registered since 2022; the dynamism of domestic consumption will cushion the slowdown in external demand, given the weakening demand for durable goods in the US.
We anticipate the slowdown in economic activity in Mexico will materialize towards 1H24, after the prolonged period of high interest rates.