Mexico economic activity climbs briskly in July

MEXICO CITY: A big expansion in Mexico's agriculture sector helped helped July's economic growth number beat analysts' expectations but the services and industrial sector also grew in bright spots for Latin America's second-largest economy.

Economic activity rose by 0.88 percent in July from the previous month, government statistics institute INEGI said on Wednesday, while analysts' median forecast in a Reuters poll was for a rise of 0.33 percent.

In June, economic activity had contracted by 0.19 percent, a revision from the 0.21 percent contraction originally reported.

The volatile agriculture sector expanded by 7.63 percent month-on-month, the largest gain since a 16.15 percent uptick in March but the industrial and services sector also clocked gains.

Compared with a year ago, economic activity rose 3.74 percent in July faster than the 3.60 percent expansion expected by analysts.

While Mexico's central bank has said that it is open to lowering interest rates in order to boost the economy, the fluctuating value of the peso might give policymakers pause and investors do not see a cut in the near-term.

Wednesday's surprisingly bright growth data could reassure policymakers that the economy can continue to grow without cutting rates.

Copyright Reuters, 2011