Mexico central bank lowers growth forecast for 2017, 2018

2017-03-02 10:56

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Mexico's central bank, Banxico, lowered its economic growth forecast for 2017 and 2018 on Wednesday.

Presenting the bank's latest report, governor Agustin Carstens said that Banxico predicted Mexico's GDP growth for 2017 would hover between 1.3 percent to 2.3 percent, down from the previous estimate of 1.5 percent to 2.5 percent. For 2018, the central bank lowered its expectations by a greater margin to 1.7 percent to 2.7 percent, from previous 2.2 percent to 3.2 percent.

"Taking into account...the uncertainty which has arisen about the development of the Mexican economy, combined with uncertainty about bilateral ties and healthy public finances, we consider it correct to lower our growth estimations for the country in the year ahead," explained Carstens.

He added that Mexico faced potential economic risks, such as a lowering of remittances from abroad or certain companies canceling their investment plans in the country.

According to the report, inflation will continue to rise in 2017, exacerbated by the adjustment of gas prices.

The bank expects inflation, which stood at 4.71 percent in February, to fall to around 3 percent by the close of 2018.

The ratings agency Moody's also lowered its growth expectations for Mexico from 1.9 percent to 1.4 percent in 2017 and from 2.3 percent to 2 percent in 2018 last week.

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