4Q24 aggregate supply and demand rose by 1.9% YoY NSA (Bloomberg: 2.2%, prior: 2.4%). Exports continued to be the main positive contributor to demand, increasing by 12.9% YoY, driven by exchange rate depreciation and solid external demand. Private consumption slowed during the quarter to 0.4% from 3.0% YoY in the previous quarter, while investment declined by 2.6% YoY compared to +1.6% in 3Q24 and +6.6% in 2Q24. In seasonally adjusted terms, aggregate demand remained unchanged compared to the previous quarter. Exports were the most dynamic component, up 3.6% from the previous quarter, while both consumption and investment contracted at their highest level of the year. On the other hand, imports increased by 1.2% driven by intermediate and capital items.
Our take: Today’s results confirm our view that the economy lost steam during the last quarter of 2024, driven by domestic factors leading to a broad-based domestic demand decline. Looking ahead, we anticipate that domestic demand will continue to be a drag, particularly in terms of investment, while consumption may remain moderate, due to positive fundamentals. Exports are expected to increase due to weaker USDMXN. Tariff uncertainties should lead to distortions in export data. Furthermore, worse-than-expected data from 1Q25, including industrial production and Antad retail sales, raise the likelihood of a technical recession during this period. Our forecast for this year is 0.0% GDP growth.
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