(Bloomberg) -- Mexico’s central bank cut its growth forecast for 2024 and 2025 following an economic slowdown that started in the fourth quarter of last year.
Banco de Mexico’s Governor Victoria Rodriguez said the bank revised its projection for growth this year to 1.5% from a previous estimate of 2.4%.
It also lowered the estimate for 2025 to 1.2% from 1.5%, she said during a presentation on Wednesday that focused on the country’s economic performance from April to June. Rodriguez said weak manufacturing in the US, Mexico’s top trade partner, had contributed to the deteriorated outlook.
“National economic activity is going through a period of marked weakness,” Rodriguez said. “We expect that the growth of the economy in 2024 and 2025 will moderate, and will be helped primarily by internal spending.”
Rodriguez said that the local market had lost some of its dynamism in the second quarter, and the labor market, though strong, had also shown signs of slowing. Weather had also affected agricultural production and the prolonged period of drought increased prices, she said.
Banxico sees 2024 job growth between 410,000 to 550,000, from a previous forecast of between 510,000 to 670,000, according to the report.
At this month’s policy meeting, the bank voted to lower borrowing costs by a quarter percentage-point to 10.75%. Analysts in a Citi survey predicted that the next rate move would be in September, when they expected another 25 basis point cut.
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