The monthly GDP (IGAE) increased 2.0% yoy in January, below market consensus (as per Bloomberg) and our forecast, both at 2.6%. Using calendar adjusted figures, the monthly GDP annual growth stood at 1.0%, taking the quarterly annual rate down to 1.9% in January (from 2.7% 4Q23). At the margin, the monthly GDP fell by 0.6% MoM/SA, dragged by services (-0.5%) and a sharp drop in primary activity (-12.9%), associated to a drought. On the other hand, industrial output rose by 0.4% MoM/SA, driven by a resilient construction sector (2.2%) which could be associated to the culmination of AMLO’s large infrastructure projects, while manufacturing expanded at a soft pace of 0.2%. Activity momentum remained weak, with the qoq/saar of the monthly GDP falling by 2.9% in January (from -0.5% in 4Q23).
Our take: The weakness in activity data at the beginning of the year (especially in services), follows January’s lower-than-expected retail sales data published yesterday, which are both difficult to square with the resilience of the labor market and the frontloaded expansionary fiscal stance. Our GDP growth forecast for 2024 stands at 2.8% in 2024, supported also by favorable external demand.
See detailed data below
