Mexico’s Economy Achieves Eighth Straight Quarter of Growth

Mexico’s economy has exhibited robust growth, recording a 0.9% expansion in the third quarter of 2023, the fastest increase since the same period in 2022. This growth marks the eighth consecutive quarter of economic advancement, according to the National Statistics Institute. Significant contributions to this growth have come from industrial production, services, and agriculture, which experienced increases of 1.4%, 0.6%, and 3.2% respectively.

Key drivers behind this expansion include strong demand from the United States for Mexican goods, record levels of remittances, wage improvements, and a rise in consumer spending. Analysts at Fitch Ratings noted a notable uptick in private investment, particularly in the machinery, equipment, and non-residential construction sectors, attributing this surge to near-shoring trends.

However, as 2024 approaches, there may be economic challenges ahead. Jason Tuvey from Capital Economics has cautioned about potential obstacles posed by high interest rates set by the Bank of Mexico and a possible slowdown in the US economy.

Despite these concerns, Tuvey also mentioned that anticipated increases in government spending in the lead-up to the 2024 elections could help mitigate these challenges. This expected rise in government expenditure may provide necessary support to sustain Mexico’s economic momentum.