Mexico: Economy adds to uncertainty in Q1 - Wells Fargo

Analysts from Wells Fargo, explained that large discrepancies between the seasonally-adjusted data and non-seasonally adjusted data for Mexican Q1 GDP is adding to the political uncertainty, amid the ongoing political campaign for the July 1 presidential elections. 

Key Quotes: 

“Large discrepancies between the seasonally-adjusted data and non-seasonally adjusted data for Mexican GDP in Q1 is adding to the political uncertainty hitting Mexico due to the upcoming presidential elections. Andrés Manuel López Obrador (AMLO) is expected to win if political surveys are any guide.”

“The Mexican economy grew a strong 1.1 percent sequentially and seasonally-adjusted in Q1 while growing 2.4 percent compared to a year earlier. However, the non-seasonally adjusted performance in Q1 compared to the same quarter a year earlier showed a weaker economy, up only 1.2 percent. The mismatch between seasonally and non-seasonally adjusted results has to do with the Easter season falling mostly in Q1 this year compared to last year.”

“We believe that both numbers may not reflect the true state of the Mexican economy. That is, the economy’s performance is probably not as strong as the seasonally-adjusted numbers reflect, while it is not as weak as the non-seasonally adjusted numbers show.”

“We will wait for more information on Q2 to make adjustments to our current call on Mexican GDP growth, which stands at 1.9 percent for the whole of 2018.”