Slower growth forecast in Mexico
MEXICO CITY — Mexico slashed its economic growth forecast for 2008 on Wednesday as a possible recession loomed in the United States, its top trading partner.
The Finance Ministry said it now expected the economy to expand just 2.8% this year, compared with its previous forecast of 3.7% growth.
The new forecast comes amid turmoil in the U.S. housing and credit markets. A report Wednesday showed that the U.S. economy grew 2.2% in 2007, its lowest rate in five years.
Mexico’s central bank also cut its growth estimate sharply while maintaining its forecast for a spike in inflation later this year, a situation it said had made interest rate decisions more difficult.
The central bank lowered its economic growth forecast for 2008 to between 2.75% and 3.25% from between 3.25% and 3.75% previously.
Slow U.S. growth is bad news for the economy in Mexico, which sends about 80% of its exports to its northern neighbor.
Sign up for Essential California
The most important California stories and recommendations in your inbox every morning.
You may occasionally receive promotional content from the Los Angeles Times.
