ZCZC
BFF-26
MEXICO-ECONOMY-GROWTH
Mexico cuts growth forecast for this year and 2020
MEXICO CITY, April 2, 2019 (BSS/AFP) – The government of Mexico, Latin America’s second largest economy, has cut its growth forecast for this year and 2020, but also projected a fall in inflation.
For 2019, the finance ministry estimated growth would be between 1.1 and 2.1 percent compared to its previous forecast of 1.5 and 2.5 percent.
For next year, GDP was projected to grow between 1.4 and 2.4 percent, below the previous range of 2.1 to 3.1 percent.
Both forecasts are part of a document that will be used to draw up the budget for 2020 and which was delivered to the Congress on Monday.
The ministry cautioned that the estimates “do not take into account the effects of the economic development strategy of the current administration nor other factors that may imply stronger growth”.
Along with an aggressive program of austerity and spending cuts, the leftist government of President Andres Manuel Lopez Obrador has been implementing social programs, which include financial support for various vulnerable groups and which are expected to stimulate spending.
Mexico’s central bank in February had also dropped its growth projections for 2019 and 2020.
It had blamed the decline on external factors such as a slowdown in global economic and commercial activity, as well as a dip in the US industrial sector’s performance.
The United States is Mexico’s main trade partner.
The finance ministry on Monday forecast inflation in 2020 would fall to 3 percent, down from an estimated 3.4 percent for this year.
It projected public deficit would drop to 2.1 percent of GDP in 2020 from 2.5 percent this year.
BSS/AFP/AU/12:45 hrs