The Central Bank of Mexico (Banxico) downgraded its economic growth forecast for 2019 and 2020 on Wednesday, Nov. 27, citing weak production and uncertainty.
The bank’s latest report lowered its growth forecast for this year to between -0.2 and 0.2 percent from the previous projection of 0.2 to 0.7 percent.
For 2020, expected growth was adjusted from the earlier forecast of 1.5 to 2.5 percent to 0.8 to 1.8 percent.
“The latest information shows Mexico’s economic weakness will be greater and last longer than previously forecast,” Banxico said in a written report.
In addition, there is “the expectation that growth in the fourth quarter of the year will be affected by decreased activity in the automotive sector,” the report said.
Next year’s slight growth figures are based on an expected gradual recovery in domestic consumption, but lower-than-expected growth in industrial activity in the United States, Mexico’s biggest trade partner.
“It should be noted that there is a high degree of uncertainty around these outlooks, given that the Mexican economy will continue to confront a difficult environment,” said the bank.
The report came on the heels of the latest economic indicators released by the National Statistics and Geography Institute (Inegi) on Monday, Nv. 25, which showed the economy underwent a recession in the first half of 2019 and stagnated in the third quarter.
In 2018, Mexico, Latin America’s second-largest economy after Brazil, saw a 2 percent growth in GDP.