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    Mexico | GDP measured by the demand side and the supply side tells a different story

    Published on Wednesday, August 28, 2019 | Updated on Saturday, August 31, 2019

    Mexico | GDP measured by the demand side and the supply side tells a different story

    Summary

    The matching of GDP growth rates measured by expenditure components and that measured by production value has deteriorated consistently, and recently more sharply.

    Key points

    • Key points:
    • In practice, GDP growth measured on the supply side should be very similar to that measured by expenditure components; in Mexico, this is not the case. Although the parallel between the original series is high with seasonally-adjusted series, one may even grow when the other decreases, which significantly hinders economic analysis
    • The deterioration in the pairing shown by both measurements in Mexico suggests that it is time for INEGI to move the measurement of GDP to the methodology that aggregates the expenditure components, similar to that used by the Bureau of Economic Analysis in the US
    • Together with the measurement of GDP by expenditure components, it is essential to change to the indirect seasonal adjustment method to ensure that economic growth can be easily interpreted in terms of the development of private consumption, government consumption, private and public investment and net exports

    Geographies

    Topics

    Authors

    Javier Amador BBVA Research - Principal Economist
    Saide Aránzazu Salazar BBVA Research - Principal Economist
    Carlos Serrano BBVA Research - Chief Economist

    Documents and files

    Report (PDF)

    190828_Mexico_GDPMeasurement.pdf

    English - August 28, 2019

    Report (PDF)

    190828_Mexico_MedicionPIB-2.pdf

    Spanish - August 28, 2019

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