MEXICO CITY: Mexico's economic activity expanded slightly in January after shrinking during the prior month, official data showed on Monday, exceeding analyst expectations and tempering the risk of a contraction in the first quarter.
Economic activity grew 0.2 percent in January compared with the prior month in seasonally adjusted terms, the national statistics agency said. An analyst poll forecast the figures to shrink 0.2 percent in the month.
That compares to a contraction of 0.4 percent from November to December.
"The report is better than what we expected but it's still consistent with our outlook for deceleration of economic activity, at least during the first half of the year," Banorte said in a report.
"Today's data reduces the possibility of a contraction in the first quarter 2019," Banorte added.
Several institutions pared back expectations for Latin America's second-biggest economy after a slowdown at the end of last year. The government is forecasting 2.0 percent growth for 2019, while Mexico's central bank has predicted growth could be as low as 1.1 percent.
Year on year, economic activity rose 1.2 percent in seasonally adjusted terms. That is slightly above the growth of 1.1 percent expected by analysts.
The Mexican peso gained modestly after the release of the data, helped by the better-than-expected economic data, a weak U.S. dollar and a rebound in global oil prices, said CI Banco analyst James Salazar.