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article imageMexico lowers 2019 GDP projection, blames external factors

By AFP     Feb 27, 2019 in World

Mexico's central bank on Wednesday dropped its gross domestic product growth projection for 2019 from 1.7-2.7 percent to 1.1-2.1 percent. It also lowered its 2020 estimate to a range of 1.7-2.7 percent.

Its governor Alejandro Diaz de Leon blamed the drops on external factors such as a slowdown in global economic and commercial activity, as well as a dip in the US industrial sector's performance.

The United States is Mexico's main trade partner.

On the domestic front, Diaz de Leon pointed to problems with the distribution of fuel due to government measures taken to combat theft, the blocking of railway tracks by striking teachers, and industrial action by textiles workers in the country's north, as contributing to the lowered projections.

A slowdown of the economy at the end of 2018 "also had an impact, reducing the projections for the first quarter of 2019," added Diaz de Leon.

However, the new free trade agreement signed with the US and Canada has created a factor of risk and opportunity for the Mexican economy.

Although the new pact, created to replace the North American Free Trade Agreement, has been signed, it has yet to be ratified and a delay in that could affect Mexico's GDP, Diaz de Leon said.

He also pointed to uncertainty around foreign investments in Mexico as another debilitating factor.

GDP grew by 2.0 percent in 2018, a touch under the projected 2.1 percent.

Diaz de Leon acknowledged that inflation, which hit 4.37 percent at the end of January, was a long way from Mexico's target of 3.0 percent.

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