Quotes from Barclays Capital:- Mexico’s GDP increased 0.5% q/q sa in Q3 on the back of expansion in the three sectors of the economy: secondary (0.4%), tertiary (0.5%) and primary activities (2.5%). In annual terms, the Mexican economy grew 2.2% in line with our forecast (Barclays: 2.2%, consensus: 2.3%).- This report is also in line with our annual forecast of 2.1% for 2014. We believe that there are still downside risks to growth because the economy contracted in both August (-0.2% m/m sa) and in September (-0.1%) according to the GDP proxy reported also today. On the other hand, US manufacturing decelerated in October, suggesting a lower external push for Mexico.- The report confirms our view that the economy is still fragile, although still growing in q/q terms. However, because the economy has contracted slightly in the past two months and downside risks are still present (global weakness and fragile domestic economy) we are maintaining our view as the most likely bias in monetary policy, particularly since inflation might decline faster than expected and the economy could remain weak.
The material has been provided by InstaForex Company – www.instaforex.com