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Mexico’s central bank has taken its scissors to its 2017 growth forecast in its quarterly report, its fifth downward revision in a row.
Its new goal is 1.3 to 2.3 per cent, compared with a 1.5 per cent to 2.5 per cent range outlined last November. For reference, this time last year, Banxico realised its 3 to 4 per cent goal for 2017 was out of reach and cut it to 2.5 to 3.5 per cent, before paring it further in May, August and November, writes Jude Webber in Mexico City.
The latest revision will come as a surprise to no one – A Citibanamex poll of market participants just over a week ago found a median forecast of 1.5 per cent growth this year, with the highest at 1.8 per cent and the lowest at zero.
José Antonio Meade, finance minister, acknowledged this week that growth was going to be lower than thought, at some 1.5 to 1.7 per cent, compared with a goal in the budget of 2.5 per cent.
While Mexico’s economy will benefit if the pace of growth picks up in the US, President Donald Trump’s threats to renegotiate a North American Free Trade Agreement that is more beneficial to the US, and talk of a so-called border adjustment tax, have cast a shadow over Mexico’s economy.
The economy grew 2.3 per cent in 2016. The bank has also revised down its 2018 forecast to between 1.7 and 2.7 per cent, compared with an earlier 2.2 to 3.2 goal.
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