MEXICO CITY: Mexico’s central bank cut its economic growth forecast for the country further on Wednesday, citing uncertainty over ties with its key trade partner the United States under President Donald Trump.
The Bank of Mexico in a report forecast growth of between 1.3 and 2.3 percent in Latin America’s second-biggest economy.
That was down from an earlier estimated range of 1.5 to 2.5 percent. It followed an earlier cut in the forecast in November following Trump’s election win.
The government this week also slashed its forecast to between 1.5 and 1.7 percent.
Trump has vowed measures he says will protect US jobs and industry, but which Mexico fears will cost it dearly.
Mexico sends 80 percent of its exports to the United States.
Trump has called for a renegotiation of the North American Free Trade Agreement with Mexico and Canada, and vowed to crack down on US companies producing in Mexico, hoping to see jobs shifted back to the United States.
He has also threatened to block remittances sent to Mexico by Mexican workers in the United States.
The Mexican bank’s governor Agustin Carstens said its board lowered the forecast “taking into account uncertainty over the bilateral relation with the United States, the need to consolidate healthy public finances and monetary policy.”
It lowered the 2018 growth forecast by a hefty five points to a range of 1.7 to 2.7 percent.