Latin Americas Second Biggest Economy Posts Slim Growth in Q1

Latin America's Second Biggest Economy Posts Slim Growth in Q1

Mexico's economy grew only 0.8% due to lower demand both domestic and foreign.

MEXICO CITY -- Amid a drop in industrial activity, Mexico's economy grew 0.8% in the first quarter compared to a year earlier, official figures showed Friday.

The government had predicted a rise of 1% in the first three months of the year compared to the first quarter of 2012.

Latin America's second biggest economy after Brazil also posted growth of 0.45% in the first three months of the year compared to the last quarter of 2012, according to the national statistics agency INEGI.

Eduardo Gonzalez, analyst at Mexican bank Banamex, said the lower-than-expected growth was partly due to a drop in demand from the United States and the fact that there were fewer working days in the past quarter compared to the same period last year.

"Internal and external demand for Mexican goods, whose main customer is the United States, has been very slow," Gonzalez said.

A rise in production of corn, wheat, avocado, beans and other fruits and vegetables led to a 2.8% increase in agricultural output in the first quarter compared to the same period last year, according to INEGI.

The services sector, ranging from media to real estate and the financial sector, saw a 1.9% rise.

But construction, manufacturing and utilities posted a 1.5% drop in output in the first quarter.

Mexico has recovered from a deep recession in 2009 that was sparked by the U.S. financial crisis. The nation's economy expanded by 3.9% in 2012 and the government is forecasting 3.5% growth this year.

Copyright Agence France-Presse, 2013

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