The 4Q24 flash GDP rose only 0.6% YoY, lower than Bloomberg’s market consensus (+1.0%) and our forecast (+1.2%). This represents a deceleration relative to 3Q24 (+1.6% YoY) due to supply shocks that affected the beginning of the quarter (hurricanes, closure of roads, and strikes). Primary activities stood at -4.6%, industry at -1.7% and services at +2.1%, on annual basis. Using seasonally adjusted data, GDP decreased 0.6% QoQ with industry and primary activities as the main drags at -8.9% and -1.2%, respectively, while services contributed slightly positively with a quarterly growth of 0.2%.
Considering that the observed monthly GDP averaged +0.65% YoY in Oct-Nov, today’s estimate implies that December was close to +0.39%. Our calculations suggest a contraction at the end of 2024 of 0.60% MoM (from +0.4% in November), lower than INEGI’s nowcast of +0.4% MoM.
The full year rose 1.5% YoY (from 3.3% in 2023), lower than our forecast of 1.7% and Banxico’s expectation of 1.8%, according to its last quarterly report. The final GDP release is schedule on February 21st.
Our take: Going forward, we expect that the economy continues to grow at a moderate pace this year, mainly supported by consumption and services due to still positive fundamentals such as increasing real wage bill and high levels of consumer confidence. The statistical carry-over for 2025 after today’s release is at only 0.1%. We forecast a GDP growth of 1.5% this year, but with a negative bias given that activity was already contracting in the end of last year on top of the headwinds related to the trade relationship with the US going forward. Having said that, the slower than expected activity adds to the recent Board communication favoring a 50bps cut at the Banxico meeting next week, given no major volatility regarding tariffs this weekend.
See detailed data below
