Mexico’s industrial output rose by 1.7 percent from August to September, the biggest leap in nearly two years. Analysts had expected a negligible 0.21 percent increase, but the hearty rebound of America’s car industry helped Mexican car factories chalk strong gains. In addition to manufacturing, the construction industry posted a healthy uptick.
“Despite all the bad news abroad, the pace of Mexican economic activity is doing fine,” said Rafael Camarena, an economist at Banco Santander in Mexico City. “Still, we see a moderation in growth early next year,” noted Camarena.
Indeed, Agustin Carstens recently projected growth in the 3-4 percent range for 2012, down one point since May’s estimates. The revised figure takes into account slowing growth north of the border. Interestingly, Carstens also reiterated the central bank’s “neutral” stance to a change in interest rates, dovetailing with data that shows inflation is subdued in Mexico.
For the first time in a decade Mexico’s economic growth may surpass Brazil’s. Since summer, Brazil’s 2011 GDP projection has been repeatedly revised, from 3.9 percent in August to 3.5 percent in September. The most recent estimate by Febreban, Brazil’s banking federation, forecasts 3.2 percent growth. Likewise, Brazil is now expected to grow 3.6-3.8 percent in 2012.
Colombia’s forecasts have also moderated and on November 11, the same day Mexico’s output numbers were released, a Reuters headline noted that Colombia’s central banks “frets” over a global slowdown. In the regional schema, Mexico is well placed compared to other major economies, as its industrialized economy is less reliant on commodity exports to China.
Slower growth shouldn’t cause too much alarm, so long as inflation doesn’t eclipse it.
