Mexico economy seen growing in the second quarter

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MEXICO CITY (Reuters) -Mexico’s economy likely slightly picked up steam in the second quarter, buoyed by growth in the manufacturing and service sectors that offset weakness in agricultural activity, a Reuters poll showed on Tuesday.

Gross domestic product likely expanded 0.4% in the second quarter from the previous quarter in seasonally adjusted terms, according to the median forecast of 13 analysts.

The forecast compares with 0.2% growth in the January-March period, when Latin America’s second-largest economy narrowly avoided a feared technical recession.

“The improvement of industrial activity, particularly in construction, and the resilience of services likely offset weak agricultural output and underpinned second-quarter growth,” said Pantheon Macroeconomics.

In unadjusted terms, however, the economy was seen having expanded by 0.2% compared with the same period a year earlier, the slowest pace of growth since early 2021.

Looking ahead, the outlook points to a challenging second half of the year, mainly due to persistent uncertainty surrounding the trade policies of the United States, Mexico’s top trading partner.

Mexico’s national statistics agency, INEGI, is scheduled to release the preliminary second-quarter GDP data on Wednesday.

The International Monetary Fund on Tuesday updated its outlook for Mexico, forecasting the economy will grow 0.2% this year. Although that is an improvement over the 0.3% contraction expected in the IMF’s April report, it would still mark the economy’s worst performance since the pandemic.

(Reporting by Gabriel Burin in Buenos Aires; Writing by Noe Torres in Mexico City; Editing by Leslie Adler)