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Analyst Views On Q1 GDP

MEXICO
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  • Real GDP edged up by 0.2% q/q (sa) in Q1, marginally above the +0.1% consensus. However, annual GDP growth came in well below expectations, at +1.6% y/y, vs. +2.3% expected. Growth was supported by a solid performance from the services sector (+0.7% q/q), offset by weakness in the industrial and primary sectors.
  • Goldman Sachs note that growth momentum has softened visibly during 4Q23 and 1Q24, and going forward they expect real activity to face headwinds from high rates and declining workers’ remittances. Pantheon also note the economy’s sluggish growth, although they expect activity to maintain some resilience in the near term (without any dramatic improvement), supported by increased public spending and a strengthening US manufacturing sector, provided the MXN stabilises.
  • As noted, USDMXN is trading back above 17.00 following the US data, although the move lags regional peers today. USDMXN is in consolidation mode and resistance at 17.3860, the Jan 17 high, remains an important reversal trigger. On the downside, initial support lies at 16.8696, the 50-day EMA.
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  • Real GDP edged up by 0.2% q/q (sa) in Q1, marginally above the +0.1% consensus. However, annual GDP growth came in well below expectations, at +1.6% y/y, vs. +2.3% expected. Growth was supported by a solid performance from the services sector (+0.7% q/q), offset by weakness in the industrial and primary sectors.
  • Goldman Sachs note that growth momentum has softened visibly during 4Q23 and 1Q24, and going forward they expect real activity to face headwinds from high rates and declining workers’ remittances. Pantheon also note the economy’s sluggish growth, although they expect activity to maintain some resilience in the near term (without any dramatic improvement), supported by increased public spending and a strengthening US manufacturing sector, provided the MXN stabilises.
  • As noted, USDMXN is trading back above 17.00 following the US data, although the move lags regional peers today. USDMXN is in consolidation mode and resistance at 17.3860, the Jan 17 high, remains an important reversal trigger. On the downside, initial support lies at 16.8696, the 50-day EMA.