The flash estimate of GDP growth for 4Q22, published by Mexico’s statistics institute (INEGI), came in at 3.5% yoy (from 4.3% in 3Q22), above our forecast of 2.5% and broadly in line with market expectations of 3.4% (as per Bloomberg). According to calendar & seasonally adjusted data reported by the statistics institute (INEGI), GDP in 4Q22 grew at a similar pace as the unadjusted series (3.6%). Looking at the breakdown, also using calendar & seasonally adjusted data, industrial sector growth stood at 3.0% in 4Q22 (from 3.5% in 3Q22), while the services and primary sectors stood at 3.6% (from 4.5%) and 6.3% (from 3.6%), respectively. GDP growth in 2022 would stand preliminarily at 3.0%.
At the margin, activity moderated its growth pace compared to the first three quarters of last year. Using seasonally adjusted figures, GDP expanded 0.4% qoq in 4Q22 (after growing 0.9%, 1.1% and 1.2% in 3Q22, 2Q22 and 1Q22, respectively). Looking at the breakdown, industrial production expanded 0.4% qoq in 4Q22 (from 0.6% in 3Q22), while services sector growth stood at a soft 0.2% (from 1.1%).
We expect GDP growth to slow down this year to 1.3% curbed by a soft U.S. expansion and a tight monetary policy stance.