Weekly Report - 3 July 2008 (ISSN 1741-7422)

MEXICO | The economy. The official statistics agency, Inegi, announced that the economy was 3.5% bigger in the first four months of 2008 than it was in the comparable period of 2007. The figure was rather better than most independent economists had expected. The April figure, showing year-on-year growth of 6.2% was badly distorted by the fact that Easter fell in April last year, therefore giving a low base for comparison.
The service sector is particularly strong, up 6.7% in April. Manufacturing was up by 5.5% and even agriculture, which has had a difficult time, grew fast, up 7.2% year-on-year.
The strong growth may prompt the central bank to revise its GDP growth forecast upwards. The bank is currently forecasting GDP growth of 2.8% for 2008, down from 3.3% in 2007. The problem is that job growth is sluggish. Formal employment, as charted by the social security institute, IMSS, was up by only 2.6% in the first four months of 2008, down from a growth rate of 4.3% in the same part of 2007.

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