- GDP expanded 0.9% QoQ in 2Q23 (3.6% YoY). In line with our expectation, the Mexican economy maintained its positive momentum in 1H23 and a steady pace of growth over the last seven quarters.
- Industrial production grew by 0.8% QoQ, accelerating after expanding 0.6% in 1Q23. The main drivers of industrial growth in 2023 have been the most unstable sectors, mining and construction.
- Services grew by 1.0% QoQ, a slower pace than in the previous quarter (1.5%). Over the first five months of 2023, the main drivers have been transport and mass media, retail and wholesale sales, entertainment, food and lodging services.
- Looking ahead, we anticipate that growth could end up at c.3.0% in 2023.
- This 2Q23 GDP data is preliminary and subject to revisions. INEGI will publish an update to the National Accounts statistics on 29 August using a 2018 base (vs. 2013 currently).
- We expect Banxico to remain in pause mode due to the currently restrictive monetary conditions in Mexico. However, to avoid excessively tight conditions, we expect that the CB starts cutting rates by 4Q23. In this context, we continue to prefer nominal rates in general and particularly the 2-3-year tenors of the Mbono curve. In Udibonos, we prefer the long-end of the curve.