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Mexico Factory Exports Up, Consumer Imports Fastest in Over a YearTuesday, May 27, 2014 > 11:05:41
The pace of Mexican factory export growth rose in April, while non-oil consumer imports surged at their fastest pace in over a year, pointing to a strengthening economic recovery in Latin America's No. 2 economy after a weak start to the year.
Factory exports rose 2.13% in April from March, the national statistics agency said on Monday, as non-auto exports picked up 3.48%, their strongest clip since May 2013. Most of Mexico's exports are manufactured goods and nearly 80% of them are sent to the United States, where the factories were hurt by bad winter weather in early 2014.
Data on Friday showed Mexico's economy grew just 0.3% in the first quarter compared to the prior three months, prompting the government to slash its growth forecast for the year to 2.7% from 3.9% previously.
Finance Minister Luis Videgaray said the weak numbers were thanks to "practically nil" American growth in the first quarter due to bad weather, new Mexican taxes on goods like soft drinks which crimped local demand and an unexpected drop in oil output. "With the exception of the fall in oil output, these factors are transitory and recent data confirms that they are dissipating, so greater growth is expected for the rest of the year," he wrote in a column published on Monday.
Non-oil consumer imports rose 6.1% in April compared to March, the institute said, the fastest pace since January 2013, in a sign of stronger domestic demand. Mexican retail sales rose in March for the first time in three months, boosting hopes for a nascent recovery in consumer spending. But imports of semi-finished factory inputs and capital goods like machinery fell, pointing to continued headwinds for manufacturers. Auto exports also dipped.
Mexico's central bank kept interest rates on hold last month at a record low of 3.5%, citing signs of improved growth. Policymakers are expected to hold down borrowing costs into next year to aid the economy after a slowdown last year and a weak start to 2014.
Mexico posted a $323 million trade deficit in April when adjusted for seasonal swings, the national statistics agency said. In non-seasonally adjusted terms, Mexico posted a trade surplus of $510 million.