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BBVA Says Sluggish Activity Points To Gloomy Outlook For H2

MEXICO
  • BBVA says that the sluggishness of economic activity in Q2 points to a gloomy outlook for H224, with an extended slowdown in the manufacturing sector, given the deceleration in external demand for durable goods, and the loss of momentum in the tertiary sector.
  • Although the construction sector has managed to maintain momentum so far this year, it has not been enough to offset the contraction in manufacturing. In the tertiary sector, although the retail segment had remained resilient at the beginning of the year, the latest data suggest less dynamism in the real wage bill in recent months.
  • BBVA believes that the Q2 GDP data corroborate their downward bias on the 2024 growth forecast, which could be closer to growth seen in production in H1. Longer-term, among the factors that could have a positive impact on activity includes the materialisation of the nearshoring process, with the associated positive effect on gross fixed investment.

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