The IGAE registers a 0.6% drop at a monthly rate

MEXICO CITY (El Universal).— National economic activity fell 0.6% in April compared to March of this year, when it had a zero variation, according to the Global Indicator of Economic Activity (IGAE) of Inegi.

The figure was more negative than the 0.3% decline originally forecast by the statistics institute.

In particular, Inegi estimates that service-related activities fell by 0.6%, which contribute two-thirds of the economy and are associated with household consumption in the country.

Industry, which accounts for a third of the economy and is linked to foreign trade, fell by 0.5%; agricultural activities fell by 2.5%, although this sector represents less than 4% of the total national economy.

The report surprised on the downside due to weaker-than-expected performance in trade, mass media information, manufacturing and the agricultural sector, activities that were only partially offset by growth in construction, business support services and leisure, explained analysts at CitiBanamex.

Aggregate economic activity continues the deceleration trend that began in the last months of 2023; however, in May and June there will be a temporary rebound in activity related, to a certain extent, to the expansion of public spending.

For the second half of 2024, growth will remain moderate, as U.S. economic activity loses traction, labor market conditions ease, real interest rates remain very high, and uncertainty related to the policies of the new administrations in Mexico and the United States leads to more cautious investment decisions by companies, the bank estimated.

The survey that CitiBanamex applied this week to 36 banks, brokerage firms and analysis groups of the national and foreign private sector showed that economic growth projections fell from 2.2% to 2.1% for 2024 and from 1.8% to 1.7% in 2025.

Agriculture is more volatile, impacted by severe levels of drought. Although the results are negative, the figures for May and June are more positive, supporting the view of an acceleration in the second quarter of the year, according to Banorte.