April 30, 2018 / 2:16 PM / 6 months ago

Mexico economy picks up speed in first quarter-preliminary estimate

MEXICO CITY (Reuters) - Mexican economic growth accelerated in the first quarter, preliminary data showed on Monday, driven by a jump in activity in the service sector and solid advances in manufacturing and agriculture.

A general view shows buildings in Mexico City, Mexico, March 15, 2018 Picture taken through a glass window. REUTERS/Henry Romero

Latin America’s second biggest economy grew by some 1.1 percent in seasonally adjusted terms compared with the previous three-month period, the estimate from the national statistics agency showed.

That was an acceleration from the fourth quarter of last year, when the economy grew by 0.8 percent on the quarter, according to final data published on Feb. 23.

Compared to the same quarter a year earlier, the economy grew by 1.2 percent in unadjusted terms, the agency said.

Final data for the first quarter will be published on May 23, the agency said.

A breakdown of the seasonally adjusted data showed the industrial sector grew by 0.7 percent in the first quarter compared with the October-December period, while agriculture advanced 0.8 percent and services expanded by 1.2 percent.

Mexico’s economy faced challenging conditions in 2017, and uncertainty continues to swirl around the future of the North American Free Trade Agreement (NAFTA), which underpins the bulk of the country’s exports.

U.S. President Donald Trump has threatened to dump NAFTA if it cannot be renegotiated to his liking and ministers are due to meet for more talks on updating accord next week. Mexico also holds a presidential election in July.

Mexican inflation ended last year at a 16 1/2-year high, prompting the central bank to raise interest rates to 7.5 percent in February. However, inflation has begun to ease in 2018, giving some relief to consumers.

Reporting by Dave Graham; Editing by Bill Trott

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