Mexican central bank downgrades growth forecast to 1.5%

View of the Mexican Stock Exchange building showing the different types of world currency quotes and stock market operations in Mexico City on June 12, 2024. Mexican president-elect Claudia Sheinbaum said on June 11 that investors had nothing to fear from proposed judicial reforms that have rattled confidence in Latin America’s second-largest economy. (Photo by Yuri CORTEZ / AFP)

Mexico City, Mexico — Mexico’s economic growth is expected to slow to 1.5 percent this year amid an uncertain global outlook, the central bank said Wednesday, downgrading its forecasts for Latin America’s second-largest economy.

“External demand will continue making a low contribution to Mexico’s growth during 2024 as the US manufacturing sector is expected to remain weak,” the Bank of Mexico said.

Previously it had predicted growth of 2.4 percent this year.

“Economic activity in Mexico is experiencing a period of marked weakness,” the central bank said in a quarterly report.

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Without a boost from exports to the United States, Mexico’s main trading partner, domestic spending is expected to be the main driver of growth.

The Bank of Mexico cut its forecast for economic growth next year to 1.2 percent from 1.5 percent.

“By 2025, the better performance of US industrial production that is expected would contribute to a higher external demand in Mexico, although these forecasts are subject to high uncertainty,” it said.

Mexico’s gross domestic product (GDP) increased by 0.2 percent in the second quarter of this year from the previous three-month period, according to an official preliminary estimate.