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Economy / Mexico


April 2012 | Data Release

In January, Mexico's economic activity indicator (IGAE) surprised to the upside, recording robust 4.4% y-o-y expansion on the back of continued gains in the country's commercial and manufacturing sectors. The services sector remains the top contributor to expanding economic activity, growing by 5.4% y-o-y in January while the manufacturing sector expanded 4.2% y-o-y. We believe gradual gains in consumer confidence and a rapid expansion in consumer credit will support commercial sector growth. Meanwhile, following the weaker manufacturing growth in 2011 we expect the sector will begin to rebound. Growth of manufacturing exports has been ticking up since the start of the year, recording expansion of 14.8% y-o-y in February. However, while this supports our above-consensus 3.4% real GDP forecast though, we caution that the US recovery is apt to remain unsteady, keeping growth below last year's 3.9% reading.

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