Mexico’s GDP grows in 2010 at fastest pace in a decade

Mexico’s gross domestic product expanded last year at the fastest pace in a decade as Latin America’s second-biggest economy recovered from a 2009 recession provoked by the global financial crisis.

GDP, the broadest measure of a country’s output of goods and services, grew 5.5% last year, the most since 2000, the national statistics agency said Monday. GDP expanded 4.6% in the fourth quarter from a year earlier. The economy was forecast to grow 4.4% in the final quarter, according to a Bloomberg survey.

The economy grew more than forecast in the fourth quarter because the U.S. performed better than analysts had expected, a trend that will probably continue to boost growth in its southern neighbor this year, said Sergio Martin, chief economist for Mexico at HSBC Holding.

“It was undoubtedly a high number,” Martin said from Mexico City. “The fourth-quarter dynamic helps you see the boost from the U.S.” that will continue in 2011.

In the U.S., rising consumer spending, business investment and exports are ensuring the economy continues to grow even as housing remains depressed. Federal Reserve policymakers said in minutes released Feb. 16 that the U.S. recovery was on a “firmer footing” while the labor market was improving “gradually.”

Mexico’s economy will probably grow more than 4.5% this year, Deputy Finance Minister Gerardo Rodriguez said. Same-store sales grew 4.8% in January, according to the country’s retail association.

Mexican Finance Minister Ernesto Cordero said Monday that while export growth was the main driver of the economy last year, domestic demand is expected to play an equally important role this year.

“It’s much more balanced growth with a much more dynamic domestic sector,” Cordero said.