The Day at a Glance | April 28 2023

*Mexico`s economy accelerated marginally in the first quarter of the year. 

*The Eurozone`s GDP slowed down more than expected at the beginning of 2023. 

*In the US, the consumer spending deflator fell to its lowest level in almost two years in March. However, its underlying component remains reluctant to decline and logged the same figure as in the previous month. 

*US personal spending recorded no variation in March. 

Economic environment

Timely GDP data indicated that Mexico`s economy grew 3.8% y/y in the 1Q23. This reading is explained by a quarterly 1.1% increase with respect to the previous period and implies an acceleration in both its annual and monthly readings (3.66% y/y and 0.46% q/q in the 4Q22). In a disaggregate manner, the services sector led quarterly growth by recording a considerable rebound (to 1.5% q/q from the previous 0.1% q/q). The secondary sector also accelerated its rate of growth, although more slightly, with a variation of 0.7% q/q compared to the previous 0.5% q/q. With this, both sectors more than offset the -3.2% q/q contraction in primary activities in the 1Q23, from the previous 2.0% q/q. On an annual basis, services again led the way with a 4.3% y/y reading, followed by primary activities (3.1%), and secondary activities (2.6% y/y). Timely GDP estimates point towards strength that prevailed in Mexico`s economy at the beginning of 2023; however, we will have to wait for the final figures to confirm said growth. 

The Eurozone`s GDP surprised to the downside by logging marginal growth at the beginning of 2023. The Eurozone`s economy logged a slight expansion (0.1%) on a quarterly basis in the 1Q23. This reading set below what was expected by the consensus, which forecasted 0.2% growth after having stagnated in the previous quarter (0.0% prev.). On an annual basis, the Eurozone also surprised to the downside with 1.3% growth, slightly below the expected 1.4% and marked a slowdown compared to the previous quarter (1.8% prev.). By country, Germany logged null growth after contracting in the last quarter of 2022. Meanwhile, France, Italy and Spain recorded slight growth.