Preliminary Estimation by INEGI Suggests Second Contraction in 2023
According to the preliminary estimation by Mexico’s National Institute of Statistics and Geography (INEGI), the country’s economic activity is projected to contract by 0.1% in July compared to the previous month.
Historical Context: Previous Contraction in March 2023
This decline marks the second contraction in 2023, with the first one reported in March when the economy fell by 0.2% on a monthly basis.
Annual Comparison: Slight Growth of 0.1%
Despite the monthly contraction, Mexico’s economic activity has shown a slight annual growth of 0.1% compared to July of the previous year.
Sectoral Analysis: Negative Performance in Secondary and Tertiary Sectors
The monthly decline is attributed to contractions in both secondary and tertiary activities, as estimated by INEGI’s Indicator of Timely Economic Activity (IOAE).
“Today’s results reflect a slight moderation in the performance of the main economic activity groups (secondary and tertiary), with a particular focus on secondary activities, as annual comparisons remain negative,” explained Monex in their analysis.
- Secondary Sector: The industrial sector, classified as secondary activities, experienced a 0.1% monthly decline and a 1.0% annual decrease.
- Tertiary Sector: Services, which fall under tertiary activities, also dropped 0.1% monthly but grew by 0.8% annually compared to July of the previous year.
Lower Economic Dynamism and Government’s Growth Estimation
Monex further noted that forecasts for June and July indicate a lower dynamism in economic activity, approaching the second quarter’s closing figures for 2025. This behavior could be attributed to reduced momentum in secondary activities and the noticeable deceleration in tertiary activities, along with the stagnant economic activity observed in May and industrial production declines in June.
Recently, the Secretariat of Finance stated that they would maintain their growth estimation within a range of 1.5% to 2.3% leading up to the 2026 Economic Package, which is due by September 8 at the latest.
Key Questions and Answers
- What is the projected economic activity for July 2023? The INEGI estimates a 0.1% contraction in Mexico’s economic activity for July compared to the previous month.
- What were the previous contractions in 2023? The first contraction was reported in March, with a 0.2% monthly decline.
- How does the annual comparison look for July 2023? There is a slight growth of 0.1% compared to July 2022.
- Which sectors contributed to the monthly decline? Both secondary (industrial) and tertiary (service) sectors experienced contractions, with the secondary sector showing a more significant monthly decline.
- What is the government’s growth estimation for 2026? The Secretariat of Finance expects a growth range of 1.5% to 2.3% for the 2026 Economic Package.
