MEXICO CITY: Mexico enjoyed solid economic growth last year before uncertainty struck over the impact of US President Donald Trump’s trade policies, official data showed Wednesday.
The 2.3-percent growth in 2016 was in line with expectations but slightly less than the previous year’s 2.5-percent expansion, the National Statistics Institute said.
The institute’s data showed that in the fourth quarter, growth in Latin America’s second-biggest economy slowed to 0.7 percent from 1.0 percent the previous quarter.
That coincided with Trump’s election victory in November.
Trump has vowed to crack down on US companies producing in Mexico, in a bid to see jobs shifted back to the
He has called for renegotiations this year of the North Atlantic Free Trade Agreement with Mexico and Canada.
Increasing barriers to US trade with Mexico could hit the Latin American country hard since it sends 80 percent of its exports to the United States.
Mexican economist Jonathan Heath told AFP that consumer and business confidence indicators had reached record lows.
“These data are telling us that the possibility is increasing that the economy may enter recession in the first half of this year,” he said.
“In the second half we could recover, but that will depend on the negotiations.”
The Bank of Mexico revised downwards its 2017 growth forecast from between 2.0 and 3.0 percent to between 1.5 and 2.5 percent after Trump’s victory in November.