Mexican economy shows slight expansion: IMEF

The Mexican economy showed a slight expansion, indicated IMEF based on its leading indicators for January 2024.

Indeed, the IMEF Manufacturing and Non-Manufacturing indicators for the month of January suggest that the economy has started the year in an expansion zone. 

In line with the results of the IMEF Indicator for the last months of 2023, which suggested a slowdown in economic activity, the economy only grew 0.1% in the fourth quarter of 2023, according to the timely estimate of GDP published by Inegi. 

However, the results of the IMEF Indicator for the first month of this year, anticipate a better start compared to December. 

On the one hand, the IMEF Manufacturing Indicator for January increased 1.5 points with respect to December, placing it in the expansion zone by registering a level of 51.6 units. 

On the other hand, the Non-Manufacturing IMEF Indicator decreased marginally (-) 0.2 points, closing at 52.0 units. The services and commerce sector continues in the expansion zone, accumulating 24 consecutive months in this zone; nevertheless, the growth rate has registered a slight moderation in recent months. 

The IMEF Indicator ranges from 0 to 100 points and the level of 50 points represents the threshold between an expansion (greater than 50) and a contraction (less than 50) of economic activity.

Mexican Economy

According to the timely estimate of GDP published by INEGI, Mexico’s economy slowed down in the fourth quarter, registering a quarterly growth of 0.1%, which compares to an average quarterly growth of 0.9% in the first three quarters of 2023. 

This result is in line with the signals that the IMEF Indicator emitted throughout the year-end, which suggested a lower economic dynamism. 

With the full 2023 data, the Mexican economy should have expanded by 3.1% for the year, with growth of 3.6, 2.9 and 2.2% in industrial production, services and primary activities, respectively.

Through the third quarter of 2023, the economy expanded at an average quarterly rate of 0.9%, above its last cycle average of 0.5%. While the slowdown in the fourth quarter of 2023 is significant, this adjustment does not necessarily imply that in the first months of 2024 the economy will continue to observe this lower dynamism. 

In fact, as suggested by the IMEF Indicator data for January, the economy may have increased its growth rate compared to December 2023.