The Day at a Glance | November 24 2023

The Top

*The Global Indicator of Economic Activity (IGAE for its acronym in Spanish) increased more than expected during September. Additionally, the final GDP reading remained unchanged at 3.3% y/y after recording a quarterly 1.1% figure.

*After 48 days of hostilities, Israeli troops and Hamas fighters initiated a four-day ceasefire this Friday, during which, as agreed, they will exchange 50 hostages held by the Palestinian militia for 150 women and children imprisoned in Israel.

*The German economy logged a -0.1% q/q contraction during the 3Q23, primarily due to a -0.3% q/q decrease in private consumption, a sector that represents two-thirds of GDP. Thus, the annual figure for Germany’s gross domestic product was -0.4%, its lowest figure since the 1Q21.

*This morning, US PMI´s will be made known. 

Economic environment

Local economic activity remained strong through the middle of the third quarter, exhibiting better momentum than expected by the market. This Friday, INEGI (National Institute of Statistics and Geography) released the figures for the General Indicator of Economic Activity, better known as IGAE, for September. The annual figure set at 3.34%, which is lower than the 3.7% recorded in the previous month but surpassed the 3.0% forecasted by analysts. Furthermore, seasonally adjusted figures logged acceleration to 3.68% y/y from August’s 3.54%, significantly exceeding the 3.0% y/y estimated by the same IGAE with its timely indicator IOAE (Timely Indicator of Economic Activity) earlier in the week. On a monthly basis, the IGAE also strengthened with a 0.6% reading (vs. 0.45% m/m prev.), boosted entirely by a rebound in tertiary activities, which recorded a 0.9% m/m increase (vs. 0.37% m/m prev.). This more than offset the slowdown in the secondary sector (0.5% m/m vs. 0.32% m/m prev.) and the -2.99% m/m contraction in primary activities. Despite heterogeneous monthly growth, annual readings remained quite positive, with a 0.8% figure in the primary sector, 4.5% in the industrial sector, and 3.5% in tertiary activities. Lastly, the final GDP reading for the 3Q23 remained unchanged, with an annual 3.3% expansion resulting from a 1.1% quarterly increase. This further increases the likelihood that Mexico´s economy has grown by more than 3.0% throughout the entire year.