MEXICO CITY, July 11 (Xinhua) — Mexico’s economy is showing signs of a greater slowdown than anticipated, the Central Bank of Mexico (Banxico) said on Thursday.
Most of the bank’s five-member governing board agreed “the growth outlook has continued to deteriorate, given the recent evolution of economic activity in Mexico,” Banxico said in a statement.
Banxico blamed the slowdown mainly on a dip in domestic consumption and “weak” investment, but added external factors were also in play.
One key uncertainty weighing down the economy is that the United States and Canada have yet to ratify the United States-Mexico-Canada Agreement (USMCA), which was negotiated to update and replace the North American Free Trade Agreement (NAFTA).
Mexico’s legislature has already approved the free trade deal and is eager to see its main trade partners do the same.
In addition, the bank warned of U.S. President Donald Trump’s penchant for threatening to impose trade tariffs.
“Most stressed that the current environment continues to present significant medium- and long-term risks that could affect the country’s macroeconomic conditions, its growth capacity and the economy’s process of forming prices,” the bank said.
The statement presented the conclusions of the board’s latest monetary policy meeting, which was held June 27.
In 2018, Mexico’s economy grew 2 percent. Banxico’s forecast for this year is between 0.8 percent and 1.8 percent.
Mexico’s President Andres Manuel Lopez Obrador, who took office on Dec. 1, has set a goal of 4-percent growth by funneling funds saved through government austerity toward large-scale infrastructure and development projects.