Mexico economy: Quick View – Sharp July trade deficit erases June surplus

Event

Import spending outpaced export growth for the fourth time this year. Mexico’s accumulated trade deficit has widened to reach US$3.3bn, the largest in over five years.

Analysis

In July, Mexico’s trade balance recorded a deficit of over US$1.4 bn, compared with a surplus of over US$800m in June (and a US$400m deficit in the same month in 2012). In seasonally adjusted terms, the deficit of US$366m in July was similar in scope to the deficit of over US$400m recorded in June.

Year-on-year export data showed an annual increase of 6.3% in July this year, which is derived from increases of 13.3% in oil exports and of 5.3% in non-oil products, including manufacturing products (5.6% growth) and mining exports (9.5% growth). This is consistent with signs of an ongoing economic recovery in the US. However, exports of farming and fishing products have fallen by 6.3% compared with 2012. Meanwhile, import spending growth has continued, with an increase of 9.2% in non-oil imports, including a 15.6% rise in consumer goods, and an 8.4% rise in intermediate goods. The growth in imports suggests that domestic economic activity could be gaining strength in spite of an increasingly fragile export sector in Mexico.

Article from:

Read the full articlepdf10.17 kB

EY refers to one or more of the member firms of Ernst & Young Global Limited (EYG), a UK private company limited by guarantee. EYG is the principal governance entity of the global EY organization and does not provide any service to clients. Services are provided by EYG member firms. Each of EYG and its member firms is a separate legal entity and has no liability for another such entity's acts or omissions. Certain content on this site may have been prepared by one or more EYG member firms