The Day at a Glance | April 25 2023

*The Global Indicator of Economic Activity (IGAE for its initials in Spanish), advanced at a solid pace in February, although it set below what was estimated by the IOAE. 

*The Ministry of Finance and Public Credit (SHCP for its initials in Spanish), through Banxico in its capacity as financial agent of the Federal Government, will carry out a syndicated auction of Bondes G on April 26th. 

*The manufacturing activity index of the Federal Reserve Bank of Dallas fell by 7.7 points in April compared to the previous month and set at -23.4 units, the second lowest reading since May 2022. 

*Similarly, the non-manufacturing activity index of the Philadelphia FED decreased 10 units in April and set at a 28-month low of -22.8 points. 

Economic environment

The IGAE logged an annual 3.85% rate of growth in February. Although this reading indicates a slight slowdown on an annual basis compared to the previously recorded 3.66%, it fell slightly short of what was forecasted by the Timely Indicator of Economic Activity, which expected a 4.2% figure. On a monthly basis, the IGAE increased 0.14%, less than the 0.7% expected by the IOAE, as the tertiary sector recorded a -0.12% m/m contraction, contrasting with the 0.6% considered by the IOAE. Meanwhile, primary activities rebounded by logging a monthly 4.16% rate of growth, from the previous -6.42% monthly contraction logged in January. Furthermore, it`s important to keep in mind that the figure for the secondary sector (0.73%) was already known and therefore was incorporated into the IOAE estimate. With this, on an annual basis, the tertiary sector slowed down to 3.79% y/y from the previous 4.66%, and falling below the 4.2% y/y indicated by the IOAE, accompanied by an increase of 8.2% y/y in primary activities and 3.47% y/y in the secondary sector. Overall, this reading remains positive and points out there is resilience in Mexico`s economy at the beginning of 2023 – despite a complicated economic environment.