GDP in 1Q23 grew 3.7% yoy, slightly below our forecast and flash estimate published by the Statistics Institute (INEGI) - both of 3.9% - and market consensus of 3.8% (as per Bloomberg). Using calendar-adjusted figures (published by INEGI), GDP grew at the same pace, with industrial production slowing to 2.5% yoy in 1Q23 (from 3.1% in 4Q22), dragged mainly by manufacturing (2.7%, from 4.2%) and construction (2.1%, from 2.2%) sectors. In contrast, services sector accelerated to 4.3% yoy in 1Q23 (from 3.5% in 4Q22).
At the margin, GDP expansion was supported by the services sector, while manufacturing output expanded at a soft pace consistent with a weaker external growth. GDP grew 1.0% qoq/sa in 1Q23 (slightly below INEGI’s flash estimate of 1.1%), while the previous quarter was revised 0.1 percentage points to 0.6%. Looking at the breakdown, the solid growth in the services sector (1.5% qoq/sa In 1Q23, from 0.3% in 4Q22) was partially offset by a soft expansion in manufacturing (0.2%) and construction (0.1%) sectors. The statistical carryover for 1Q23 is at 2.2%.
Our GDP growth forecast for 2023 stands at 2.4%. We expect sequential GDP growth to cool down in the last three quarters of the year given a weaker U.S. economy.