Background on the Current Account and its Significance
The current account, a component of the Balance of Payments, reported its first surplus since Q4 2024 in Q2 amidst ongoing global economic uncertainty, according to information released by the Banco de México (Banxico).
Key Figures and Composition
- Q2 surplus: $206 million
- Previous Q4 2024 surplus: $10,822 million
- Credit: $202,381 million
- Debit: $202,175 million
The surplus of 0.04% of the Productive Internal Bruto (PIB) resulted from a positive balance in goods and services ($887 million), a deficit in primary income ($15,898 million), and a surplus in secondary income ($15,217 million).
Analysis and Future Outlook
Valmex, an analysis firm, noted that the dynamism of manufacturing exports will continue to support the current account. However, they anticipate that global growth limitations and trade uncertainty from the U.S. will constrain external sector progress.
Regarding Foreign Direct Investment (FDI), Valmex expects moderated flows due to cautious business behavior in a slowing economy and reduced public spending in Mexico.
Capital Outflow Details
In terms of capital outflow, the information published by Banxico showed that it totaled $8,071 million in Q2.
- Q2 outflow: $8,071 million
- Q1 outflow: $871 million
Janneth Quiroz, director of Economic Analysis, Cambiario and Securities at Monex, attributed this to the global uncertainty and nervousness during the period. She explained that such an environment often motivates investors to redirect funds towards lower-risk assets. However, the Mexican peso appreciated 8.4% against the dollar in Q2, suggesting that the capital account balance might reflect currency conversion effects rather than actual investment withdrawals.
Key Questions and Answers
- What is the current account surplus in Q2? The surplus was $206 million.
- What were the key components of this surplus? The surplus was driven by a positive balance in goods and services ($887 million), a deficit in primary income ($15,898 million), and a surplus in secondary income ($15,217 million).
- What factors support the current account? Manufacturing export dynamism supports it, but global growth limitations and trade uncertainty from the U.S. may constrain progress.
- What is the capital outflow situation in Q2? Capital outflow totaled $8,071 million, higher than the $871 million in Q1.
