Noe Torres and Jean Luis Arce contributed to this post. Blog updated Sept 5 to add Q2 GDP data for Brazil and Mexico.
Three weeks ago, Mexico beat Brazil on Saturday to win its first-ever men’s football Olympic gold medal. What does that have to do with economics? Maybe nothing. But as The Economist notes, Mexico’s victory might just prove “just a warm-up for more good results to come” — on the economic field.
Mexico’s economy grew 4.1 percent in the second quarter from the year-earlier period. Even considering a mild slowdown from the previous quarter due to weaker U.S. demand, this growth pace far outshines Brazil’s lackluster performance since mid-2011.
Global manufacturers such as tire maker Pirelli and Volkswagen’s luxury car maker Audi have recently looked to Mexico as an alternative to China. Bucking a global trend of manufacturing weakness, Mexico’s industrial output jumped 1.3 percent in June from May, exceeding forecasts of most economists surveyed by Reuters.
Brazil, host of the 2016 Olympic Games, has been spinning its wheels as local manufacturers struggle with clogged roads and ports, exorbitant taxes and an overvalued exchange rate. Even with record low interest rates, Brazil’s economy expanded just 0.5 percent in the second quarter from the same period a year earlier, below the median forecast in a Reuters poll with analysts.