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Mexico Economy Grows Slightly in Q1, Banxico Considers Rate Strategy

Posted on May 3, 2024
Writer: James Miller

Mexico’s economy recorded a modest growth of 0.2% in the first quarter of 2024, slightly above economists’ quarterly expectations but below the expected annual growth rate. Ahead of a key central bank meeting, the economy showed a 1.6% year-on-year increase, under the forecasted 2.3%.

The economic expansion comes as Mexico’s central bank, Banxico, considers whether to implement another rate cut. Despite underwhelming growth figures, sectors like services saw an increase of 0.7%, which might influence the central bank’s decision to maintain the current interest rate. 

However, industrial production and agricultural outputs witnessed 0.4% and 1.1% declines, respectively, indicating mixed signals in the economy’s overall health.

The recent economic performance suggests a cautious approach from Banxico toward rate adjustments. Gabriel Casillas, chief Latin America economist at Barclays Plc, notes that the strength in the services sector could encourage a steady approach to interest rate cuts. 

For more information, read the full article on Bloomberg.

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