MEXICO CITY--Mexico's economy remained weak in the first quarter as the economic slowdown in the U.S. weighed on the country's vital export engine and the impact of new taxes hit domestic demand.
Gross domestic product expanded 0.28% in the January-to-March period, seasonally adjusted from the previous quarter, the national statistics agency said Friday, below expectations of 0.4%.
The increase translates into an annualized seasonally adjusted rate of 1.1%. The economy expanded 1.8% from the first quarter of 2013, helped by the shift in the Easter holiday this year to April.Adjusting for the calendar effect, growth was 0.6% from a year earlier.
Mexico's government is expected to adjust its optimistic 3.9% growth forecast for 2014 later in the day after the disappointing first quarter, in which the economy didn't clearly recover from the 1.1% expansion registered in 2013.
Household consumption, a key driver of domestic demand, showed few signs of recovery during the first quarter.
Across-the-board tax increases that came into force at the beginning of the year hit the purchasing power of consumers and business confidence, analysts said.
Services expanded 1.8% in the quarter from a year earlier, a marginal improvement from the 1.3% growth in the fourth quarter, while volatile agricultural production rose 4.9%, with higher production of corn and other crops.
During the first quarter, the industrial sector expanded 1.6%. Construction shrank 2.8%, with several major housing-construction firms struggling under a pile of debt, while the manufacturing industry advanced 4.3%, supported by the auto industry.
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Gross domestic product expanded 0.28% in the January-to-March period, seasonally adjusted from the previous quarter, the national statistics agency said Friday, below expectations of 0.4%.
The increase translates into an annualized seasonally adjusted rate of 1.1%. The economy expanded 1.8% from the first quarter of 2013, helped by the shift in the Easter holiday this year to April.Adjusting for the calendar effect, growth was 0.6% from a year earlier.
Mexico's government is expected to adjust its optimistic 3.9% growth forecast for 2014 later in the day after the disappointing first quarter, in which the economy didn't clearly recover from the 1.1% expansion registered in 2013.
Household consumption, a key driver of domestic demand, showed few signs of recovery during the first quarter.
Across-the-board tax increases that came into force at the beginning of the year hit the purchasing power of consumers and business confidence, analysts said.
Services expanded 1.8% in the quarter from a year earlier, a marginal improvement from the 1.3% growth in the fourth quarter, while volatile agricultural production rose 4.9%, with higher production of corn and other crops.
During the first quarter, the industrial sector expanded 1.6%. Construction shrank 2.8%, with several major housing-construction firms struggling under a pile of debt, while the manufacturing industry advanced 4.3%, supported by the auto industry.
nasdaq.com
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