Mexico City – Mexico’s economy could grow more than 4.5 percent this year, following a rapid expansion in the first quarter, presidential spokesman Ruben Aguilar said Thursday.
The Finance Ministry said Wednesday that gross domestic product, a measure of the output of goods and services, was 5.5 percent higher in the quarter than in the first three months of 2005.
Aguilar said it was the fastest growth for a quarter since President Vicente Fox took office in December 2000, and opens the possibility that year-end economic growth “could be above 4.5 percent.” The first-quarter expansion was boosted by a recovery in industrial production and by the Easter holiday falling in April this year instead of March, giving the period more working days.
The opposite calendar effect will occur in the second quarter.
“Although we expect the upcoming quarters to register more subdued growth than that of the first quarter, we believe the country is on track to register healthy GDP growth of nearly 4 percent in 2006,” UBS Investment Research said in a report.
BBVA Bancomer, Mexico’s largest bank, said Thursday it’s reviewing its GDP estimate and could raise it to around 4 percent, which is roughly what the Finance Ministry and the central bank are expecting.
“It’s clear that the economy is showing more favorable conditions than those expected at the beginning of the year, particularly strong U.S. consumption, higher income from oil and remittances, as well as lower interest rates,” BBVA Bancomer said.
JP Morgan said it is keeping its 4.5 percent GDP estimate for the full year, which it noted was at the top end of the range.
This is the last year of Fox’s six-year term, with elections scheduled on July 2 to pick his successor. Mexican law prohibits presidents from seeking re-election.
Aguilar enumerated several recent economic indicators, including employment, foreign reserves and interest rates, which, he said, “reveal the strength of the economy even in the framework of an electoral process.”
