Mexico IGAE index: Services still driving economy

The Mexican economy expanded 0.2% m/m sa in October according to the IGAE index, higher than expected because of a good performance in services (0.4% m/m sa), offset partially by declines in secondary and primary activities.

After this report, the GDP tracker for Q4 2015 stands at 0.6% q/q sa, slightly higher than the current forecast (0.4% q/q sa) but consistent with the economy growing 2.5% y/y in 2015 as a whole.

Industrial activities are expected to increase 0.2% m/m sa in November, while services may decelerate because of the weaker retail activity observed to date. In the coming months, weaker global activity may put downward pressure on growth, with domestic demand the main motor for the economy. All in, Mexico's GDP should expand 2.5% y/y in 2016.