Mexico's GDP Jumps Sharply; Fundamentals Appear Strong
MEXICO CITY -- On a day when fears that a cooling in the U.S. economy could damp Mexico's expansion, figures released by the country's Finance Ministry showed there's plenty of momentum here.</br></br>Mexico's gross domestic product surged at an annual rate of 7.9% in the first quarter, its fastest clip in 21/2 years and well above expectations, as the strong peso and low inflation helped spread the economic recovery to all sectors.</br></br>Mexico's industrial sector expanded by 8.6% from a year earlier, with manufacturing output rising 9.4%. Construction expanded 6.9%, while mining and energy sectors also increased by healthy margins.</br></br>Mexican officials noted that the first-quarter results were skewed by several additional working days in the period.</br></br>Strong fundamentals are the real story behind the surge, analysts said. Even before garnering a coveted investment-grade rating from Moody's Investor Service Inc. in March, the country had met its overseas debt obligations for 2000. Moreover, despite increased government spending this election year, Finance Minister Angel Gurria confirmed Mexico is on track to meet its target of a budget deficit of 1% of gross domestic product for 2000. slightly better than 1999's 1.15% figure.