UPDATE 1-Mexico's current account posts deficit in 3rd quarter
* Flagging exports, fewer remittances feed deficit
* Foreign investment in stocks, bonds hit record high
MEXICO CITY Nov 23 (Reuters) - Mexico posted a current account deficit in the third quarter as a global slowdown weighed on exports, but foreign investment in domestic stocks and bonds jumped to a record high.
Demand for exports flagged in the quarter and Mexicans living in the United States sent home less cash, leading to a current account deficit of nearly $3.7 billion in the July to September period, central bank data showed on Friday. It was the first deficit since the 4th quarter of 2011.
The quarterly balance of payment data, which provide a snapshot of Mexico's dealings with the outside world, showed that exports during the quarter slipped 3.4 percent from the second quarter to $91.243 billion.
The amount of cash sent home by Mexicans living abroad was nearly 12 percent lower than in the same period last year at $5.4 billion.
"The deficit is basically reflecting the global slowdown," said Joel Virgin, an economist at Citigroup-unit Banamex in Mexico City. "On the positive side, imports fell by a slower pace, underscoring some strength in local demand."
Imports dipped 0.6 percent from the second quarter to $92.4 billion.
The pace of growth in the third quarter, but analysts project the economy is still on track to grow close to 4 percent this year.
Meanwhile, portfolio investment by foreigners rose to a record high during the third quarter.
Central banks in the United States, Europe and Japan committed to further monetary easing in the third quarter, boosting the appeal of higher-yielding emerging market assets.
While growth in Latin America's No. 2 economy is slowing, Mexico is still holding up better than other economies amid the wider global downturn, which also makes local assets attractive.
Foreign investment in peso-denominated bonds rose to more than $14 billion, while flows into the Mexican stock market and locally issued corporate debt was $1.2 billion.
Total portfolio investment in Mexico by foreigners reached $24 billion, boosted by a share offering of the Mexican unit of Spain's Santander in New York, as well as a $2.75 billion in debt issue by Carlos Slim's America Movil .
Flows into local stocks have held up in the fourth quarter as foreigners pumped $796 million more into stocks in October, helping drive the IPC stock index to a record high, data on the central bank's website showed.
The cumulative current account deficit was the equivalent of 0.3 percent of gross domestic product, the central bank said. Year-to-date, the current account recorded a deficit of $2.6 billion.
Mexico's foreign reserves rose to a new record of $165.6 billion by the end of September.
- Tweet this
- Share this
- Digg this
- Pistorius jailed for five years for killing girlfriend Steenkamp |
- UPDATE 9-Total CEO de Margerie killed in Moscow as jet hits snow plough
- Total CEO Christophe de Margerie killed in Moscow plane accident - airport spokeswoman
- Total CEO de Margerie killed in Moscow as jet hits snow plough
- Swedish 'Cold War' thriller exposes Baltic Sea nerves over Russia