Survey Says Mexico's Economy Seen Slowing Slightly in Third Quarter Anthony Harrup - Dow Jones
go to original November 15, 2012

MEXICO CITY - Economic growth in Mexico likely lost some momentum in the third quarter of the year on slower exports and industrial output, although the country is still expected to chalk up a 14th consecutive quarter of expansion in gross domestic product following the 2008-2009 recession.

The median estimate of 12 private economists polled by Dow Jones was that GDP in the July-September period was up 3.7% from the third quarter of 2011, slightly more optimistic than the Finance Ministry's recent estimate of 3.3% and the Bank of Mexico's 3.4% forecast.

Despite the expected slowdown from 4.3% growth in the first half of the year, the numbers would keep Mexico on track to grow between 3.5% and 4% this year.

"The Mexican economy continued to gain ground in the third quarter; however, a mounting number of data points ranging from exports to imports, employment and manufacturing suggest that the pace of growth moderated at the margin," Morgan Stanley said in a report. "Persistent uncertainty about the U.S. fiscal situation and sluggish global demand are likely to weigh on Mexican growth in coming months," Morgan Stanley added.

GDP, which measures the output of goods and services, is estimated to have expanded 0.8% from the second quarter in seasonally adjusted terms, according to the Dow Jones survey, compared with 0.9% in the second quarter and 1.2% in the first.

The Mexican auto industry has continued to set production and export records, offsetting the effects of a worsening international backdrop for overall manufacturing, which has slowed down. Domestic demand, meanwhile, is seen taking up the slack.

The Bank of Mexico, in its most recent report on the economy, said consumption benefited in the third quarter from higher employment and wages, as well as continued credit expansion, although some areas of consumer credit slowed as did remittances from Mexicans living abroad, while consumer confidence deteriorated.

The central bank estimated seasonally adjusted growth of 0.6% in the third quarter from the second.

Write to Anthony Harrup at anthony.harrup@dowjones.com

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