Mexico Economic Growth Gathers Pace in First Quarter Nacha Cattan and Eric Martin - Bloomberg News
go to original May 17, 2012

Mexico’s economy grew at the fastest pace in more than a year in the first quarter as U.S. demand picked up, the latest sign that the nation is surpassing Brazil after trailing Latin America’s biggest economy for most of the past decade.

Gross domestic product expanded 4.6 percent from the year- earlier period, up from a revised 3.9 percent in the previous three months and the most since the third quarter of 2010, the national statistics office said on its website today. The median forecast of 17 analysts surveyed by Bloomberg was for growth of 4.5 percent. From the previous three months, the economy grew 1.3 percent.

Mexico’s expansion exceeded Brazil’s last year as domestic consumption and exports picked up on the heels of a U.S. recovery. The lowest inflation rate in Latin America and a benchmark interest rate that has remained at a record low for 34 months are helping improve the outlook for growth in the region’s second-largest economy, said Italo Lombardi, an economist at Standard Chartered Bank.

“Brazil is growing less than Mexico, while it used to be the other way around,” Lombardi said. “Mexico is becoming more diversified than before since we’ve seen a more solid performance of internal demand.”

Mexico’s central bank yesterday raised its growth forecast for this year to between 3.25 percent and 4.25 percent from 3 percent to 4 percent. Brazil’s economy will expand 3.2 percent this year, according to economists surveyed by the central bank.

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