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POST TIME: 1 September, 2018 00:00 00 AM
Mexico lowers economic growth projection for two years
Xinhua

Mexico lowers economic growth projection for two years

The Central Bank of Mexico (Banxico) rolled back its economic forecast for 2018 and 2019 on Wednesday. The monetary entity projected the country’s GDP growth of between 2.0 and 2.6 percent for this year, compared to the previous projection of 2.0 to 3.0 percent, reports Xinhua from Mexico City.

For 2019, Banxico reduced its growth projection to between 1.8 and 2.8 percent, compared to the previous 2.2 to 3.2 percent. While presenting the second quarter inflation report, Banxico Governor Alejandro Diaz de Leon said the adjustment is in line with the economic decline during that quarter, lackluster investment and slowing domestic consumption.

“A very important piece of data used in this revision is Gross Domestic Product growth, which clearly was not what was anticipated and led to revising the outlook,” Diaz de Leon said during a press conference.

The Mexican economy, the second largest in Latin America, contracted 0.2 percent during the second quarter compared to the previous quarter, according to data released on Aug. 24.

In 2017, Mexico’s economy grew by 2 percent, down from 2.9 percent in 2016.

The local economy still faces some risks in the short-term, including an escalation of protectionism at a global level, Diaz de Leon said.

There could also be periods of volatility in the international financial markets, and a prevailing environment of uncertainty that has been affecting investments, he said.

In addition, the governor said the understanding reached Monday between the United States and Mexico on the North American Free Trade Agreement (NAFTA) represented an “important step” which could lead to certainty in investment.