Mexico cuts 2019 growth forecast to 1.8 percent

Bloomberg

Mexico’s central bank cut its growth forecast for this year, opening the door to the possibility that Latin America’s second-largest economy will expa- nd less than 1 percent amid weak industrial production.
Growth this year is likely to be 0.8 percent to 1.8 percent, less than previously expected 1.1 percent to 2.1 percent, the central bank said in quarterly inflation report. The low end of that range is below all but one analyst forecast in a Bloomberg survey that has an average projection of 1.5 percent.
“We are adjusting the forecast range for this year downward due to temporary ele- ments that mainly affected the first quarter,” central bank Governor Alejandro Diaz de Leon said. While activity will likely rebound from a contraction in the first three months of the year, the economy is “trending toward a slowdown.”
Mexico’s economy unexpectedly shrank 0.2 percent in first quarter of President Andres Manuel Lopez Obrador’s term amid a contraction in service and industrial sectors. Despite the surprise, the central bank kept borrowing costs steady this month and analysts expect it to wait until November to cut the key rate from a decade high 8.25 percent as inflation remains above the 4 percent upper limit of the target range.