Macro Analysis /

Mexico: Ahead of the Curve

  • INEGI’s Timely Indicator of Economic Activity to show an upward revision in July’s estimate, boosted by IP

  • However, August’s print might show a sequential decline, with higher contagions dampening dynamism

  • Other relevant data includes IMSS’ employment report and ANTAD sales, with markets closed on Thursday

Juan Carlos Alderete Macal
Juan Carlos Alderete Macal

Director of Economic Research

Francisco Jose Flores Serrano
Francisco Jose Flores Serrano

Senior Economist, Mexico

10 September 2021
Published byBanorte

INEGI’s Timely Indicator will likely confirm a slowdown in 3Q21

Weekly international reserves report. Last week, net international reserves increased by US$168 million, closing at US$205.6 billion According to Banxico’s report, this was explained by a positive valuation effect in institutional assets. So far this year, the central bank’s international reserves have risen by US$9.9 billion.  

Timely Indicator of Economic Activity (August). This release will include the first estimate for August, along revised figures for July. We recall that June’s mid-point forecast stood at 15.3% y/y (using sa figures), much higher than the 13.4% in the GDP-proxy (IGAE). We expect July’s estimate, currently at 9.9%, to be revised up. This would be driven by data published since, such as industrial production, which suggest a sequential advance. For August signals are mostly to the downside, with daily COVID-19 cases reaching all-time highs by the middle of the month. This is consistent with some indicators suggesting lower dynamism, such as IMEF’s PMIs, business confidence and auto production. Nevertheless, mobility was resilient, possibly limiting a more substantial decline in activity.