(Adds quotes from official, maintaining 2017 range)
By Gabriel Stargardter
MEXICO CITY, April 28 Mexico's economy cooled
slightly in the first quarter as industrial output stagnated,
according to preliminary data released on Friday, but growth
during the start of U.S. President Donald Trump's term was
stronger than some expected.
The election of Donald Trump last year raised the specter of
recession in Mexico as he threatened to shred the North American
Free Trade Agreement. This sent the country's peso into a
tailspin and prompted several economists to lower growth
While those threats resurfaced this week, slow progress in
starting NAFTA talks and an overall softening of rhetoric about
U.S. companies that invest in Mexico have calmed the situation
ahead of Trump's 100th day in office on Saturday.
"The balance of the economy in the first 100 days of the
Trump administration can be summarized in the numbers published
by (national statistics agency) INEGI today," Luis Madrazo, the
finance ministry's chief economist, said at a news conference.
"A higher-than-expected growth rate, and a higher rate of
growth compared with last year that is showing resistance to the
uncertainty that has hit us from abroad."
Mexico's gross domestic product grew about 0.6 percent in
the first quarter, slowing slightly from 0.7 percent in the
fourth quarter, according to seasonally adjusted INEGI data.
Analysts polled by Reuters had expected a 0.5 percent growth
rate for the quarter.
Compared with the year-earlier quarter, GDP grew at an
annual rate of 2.7 percent, above analysts' expectations of 2.4
"First quarter GDP data from Mexico confirmed what we have
long suspected – that the survey data have been overstating the
weakness in the real economy," Capital Economics said in a
research note. It raised its 2017 GDP forecast to 2.2 percent
from 1.8 percent despite "lingering" risks to NAFTA.
Mexico's government has put 2017 growth between 1.3 and 2.3
percent, and Madrazo said the range remained unchanged for now,
but would be looked at again when the final quarterly results
come out on May 22.
According to INEGI's initial estimates, the industrial
sector did not expand from the fourth quarter. Weak demand in
the United States has weighed on Mexican factory output.
The data showed the services sector grew 1.0 percent in the
first quarter from the fourth, while agriculture expanded by 0.7
The U.S. economy grew at its weakest pace in three years in
the first quarter, data released on Friday showed, as consumer
spending barely increased and businesses invested less in
(Reporting by Mexico City Newswroom; editing by Frank Jack
Daniel, Lisa Von Ahn and Diane Craft)