MEXICO CITY – Mexico’s gross domestic product (GDP) increased by 2 percent last year, a slight decline from 2.1 percent in 2017, according to the preliminary estimate released Wednesday by the National Institute for Statistics and Geography (INEGI).
Latin America’s second-largest economy after Brazil has long lagged behind other emerging markets in terms of growth.
Services expanded 2.8 percent last year and the primary sector – agriculture, energy and mining – advanced 2.4 percent, but manufacturing grew by only 0.2 percent over 2017, INEGI said.
Mexico is a major oil producer and has an extensive mining industry.
Mexican GDP was up 1.8 percent in the fourth quarter of 2018 compared with the same period the previous year, as near-3 percent gains in services sector and the primary sector were undercut by a 0.7 percent decline in industrial production.
The fourth-quarter figure indicates a considerable slowing of the economy from the July-September period, when GDP expanded 2.5 percent, the report said.
The 2 percent GDP growth in 2018 was in line with the expectations of government officials and private sector analysts.
INEGI is due to release its definitive 2018 GDP data on Feb. 25.
The Mexican Finance Secretariat’s forecast for 2018 calls for growth of between 1.5 percent and 2.5 percent, with an inflation rate of 3.4 percent.
Bank of America said earlier this month that it expects Mexican GDP to grow just 1 percent in 2019 as a result of domestic spending cuts and the economic slowdown in the United States, Mexico’s No. 1 trading partner.
But President Andres Manuel Lopez Obrador said he was confident that growth would be at least 2 percent.
“My data is different. I respect those who say we won’t reach our economic growth goals, but I’m sure that we will do very well,” the leftist leader said when asked about the BofA projection.
Two weeks after taking office Dec. 1, Lopez Obrador’s administration announced an agreement with representatives of business and labor to increase the minimum wage by 16.21 percent to 102.68 pesos ($5.06) a day nationwide, and to 176.72 pesos ($8.70) in the special economic zone along the northern border.
Mexico has 124.7 million people, according to projections based on data from the 2010 census. In 2016, nearly 44 percent of Mexicans were living in poverty.