The Mexican economy is heading towards a significant recession this year, contracting by as much as 1.8 per cent as it struggles to cope with the US financial crisis and global downturn, the country’s central bank forecast on Tuesday.

Guillermo Ortiz, the central bank president, said this year’s estimated economic growth now ranged between -0.8 per cent and -1.8 per cent. “The reduced perspectives of the Mexican economy in 2009 stem principally from the severe deterioration of the external environment,” he said.