UPDATE 2-Mexican economy slows in fourth quarter as industry sinks

martes 23 de febrero de 2016 11:16 GYT
 

(Adds monthly economic activity, analyst view)
    MEXICO CITY, Feb 23 (Reuters) - Mexican growth slowed more
than expected in the fourth quarter as industry contracted by
the most in over two years despite steady services expansion,
data showed on Tuesday.
    The economy grew by about 0.5 percent from the
prior quarter, below the 0.8 percent rate in the third quarter
and expectations of 0.6 percent from analysts in a Reuters poll.
    The industrial sector, which has been hit by sinking oil
prices and production at state oil giant Pemex, fell
0.4 percent compared to the third quarter, its biggest drop
since the second quarter of 2013. 
    Services, which buoyed growth last year, grew by 0.9
percent, slightly below the 1 percent pace of expansion in the
third quarter.
    Latin America's No. 2 economy suffered last year from uneven
U.S. demand for its exports and recent weakness in U.S. factory
output could further drag on Mexico.
    Still, improving domestic demand has supported growth
despite a dramatic slump in the peso.
    Earlier this month, Mexico's finance ministry and central
bank announced 2016 budget cuts and a surprise interest rate
hike to shield the peso from a deeper slide and boost investor
confidence in Latin America's No. 2 economy. 
    But in a client note on Tuesday, Barclays said the moves
could create further headwinds for Mexican growth, which it
expects will reach 2.3 percent this year.   
    Compared with a year earlier, the economy grew
by 2.5 percent, on par with analysts' expectations. 
    A separate report showed economic activity was
flat in December on a monthly basis and expanded by 2.6 percent
in the month compared to December 2014. 

 (Reporting by Alexandra Alper; Editing by Andrea Ricci)