lunes, 22 de agosto de 2011

Mexico's growth...

The second quarter GDP figures published on Friday report an economy that grew 3.3% compared to the second quarter of 2010. That's the lowest year-over-year growth rate since the fourth quarter of 2009, when the economy contracted 2.0%.

If Mexico's growth rate is reported using the same methodology as the US headline growth rate (measured against the previous quarter and annualized), the Mexican economy grew 4.5% in the second quarter, not such a bad performance at all. In fact, the second quarter growth rate exceeded the "versus previous quarter" growth rate in both the first quarter of this year and the first and third quarters of 2010.

The "versus previous quarter, annualized" methodology is especially useful for capturing turning points in the economy's performance. From this perspective, the secondary (industrial) sector of the economy grew 5.3% in the second quarter, outpacing its growth in the previous three quarters. The tertiary (services) sector grew 3.9%, an acceleration with respect to that of the first quarter.  The drag on growth, for the second consecutive quarter, was the primary (agricultural) sector, which contracted 9.8% in the second quarter.

The industrial sector drove growth in the second quarter -- in spite of the impact of the Japanese tsunami. Is it surprising that fears that the US is in for a spell of weak growth or even recession have led so many other analysts to cut substantially their growth projections for Mexico this year?

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