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Industrial production and primary sectors were the main drags to activity in 4Q23.
2024/02/21 | Julio Ruiz

GDP in 4Q23 rose by 2.5% YoY, slightly above our forecast of 2.3% and market consensus (as per Bloomberg) and flash estimate, published by the Statistics Institute (INEGI), both at 2.4%. Using seasonally adjusted figures, GDP expanded at a soft 0.1% QoQ/SA in 4Q23, compared to an average expansion of 0.8% in the first three quarters of last year. There were some minor revisions in the previous quarterly GDP figures. The 2Q23 sequential expansion rate was revised 12-bp down, while the 3Q23 was reduced by 1-bp. Headline GDP was dragged by the primary (-1.0% QoQ/SA) and industrial (-0.1%) sectors. The latter is associated to a softening of public construction output (culmination of AMLO’s large infrastructure projects) and a weak manufacturing output. On the other hand, services sector expanded further (0.3% QoQ/SA), although at a softer pace compared to previous quarters. GDP growth for 2023 stood at 3.2%.


Our take:  We expect activity to continue expanding at an above trend pace this year. Our GDP growth forecast for 2024 is at 2.8% supported by an expansive fiscal stance and still supportive external demand. The nearshoring trend may also support activity.