GLOBAL ECONOMY

Mexico’s Economic Growth Holds Steady for Second Consecutive Year

MEXICO CITY, MEXICO - JUNE 23:  Mexican youth walk home after a political demonstration in Mexico City's zocalo square on June 23, 2012 in Mexico City, Mexico. Thousands of Mexican youth, most supporters of leftist presidential candidate Andres Manuel Lopez Obrador, have been demonstrating for a fair electoral process ahead of the July 1 presidential election. Lopez Obrador lost the last presidential election in 2006 by a small margin and never accepted the result, citing fraud. (Photo by John Moore/Getty Images)

MEXICO CITY, MEXICO - JUNE 23: Mexican youth walk home after a political demonstration in Mexico City's zocalo square on June 23, 2012 in Mexico City, Mexico. Thousands of Mexican youth, most supporters of leftist presidential candidate Andres Manuel Lopez Obrador, have been demonstrating for a fair electoral process ahead of the July 1 presidential election. Lopez Obrador lost the last presidential election in 2006 by a small margin and never accepted the result, citing fraud. (Photo by John Moore/Getty Images)  (2012 Getty Images)

Thanks to a spike in the agriculture industry, the economy in Mexico grew by close to 4 percent for the second consecutive year.

According to Mexico's national statistics institute, the country's economy grew by 3.9 percent  in 2012.

While the findings were in line with government projections made last year, the data shows growth in the country is holding steady as 2011 registered similar numbers.

Mexico’s economic performance is closely linked to the U.S., where it sends almost 80 percent of its exports.

To put the value of Mexico’s trade relations into context, the country’s exports and imports account for 60 percent of its GDP.

The institute said the reason for the consistent growth was the country’s volatile agricultural production, which increased by 7.2 percent in the last quarter of the year.

Thanks to higher production of products such as beans, corn, wheat and sugarcane, a strong domestic demand was able to offset the weaker demand for exports from Latin America's second-largest economy.

"So far, domestic demand is giving some support,” Bank of America/Merrill Lynch's chief Mexico economist Carlos Capistran told the Dow Jones.

However, Capistran adds that he thinks "it won't be for a long time," with his estimates for 2013 growth at around 2.8 percent.

Mexico's new federal government is trying to pass a series of reforms in the telecommunications and energy sectors that would increase growth and formal employment in the coming year.

"We're very positive about this year, just like last year,” Aurelio Adan, the CFO of Mexico’s second largest retailer Soriana, told Reuters last month.

“I think that Mexico is ready to grow and generate more jobs."

The Associated Press contributed to this report.

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