Pleasant surprises on the growth front in Mexico

Fortunately, we don’t have to clean the tomb of the economy here in Mexico on the Day of the Dead (Día de los Muertos). The IGAE, a monthly indicador of growth, is a precursor of the quarterly GDP figures. The September IGAE reading makes it all but certain that the Mexican economy will grow 5% (year-over-year) in the third quarter, putting the growth rate in the first nine months of 2010 at 5.6%. Even if the economy grows only 3% (year-over-year) in the fourth quarter, the annual growth rate would be 5%.

The economy’s surprisingly strong rebound from the 2009 plunge will combine with the portfolio investment-strengthened peso to put Mexico’s GDP in dollars back above a trillion dollars. This year’s GDP should fall short of 2008’s by less than US$50 billion.