Bank of Mexico Slashes 2015 Growth Estimate to Between 1.75% and 2.5% Juan Montes - WSJ.com
go to original August 12, 2015

Mexico’s central bank on Wednesday cut its growth outlook for this year, putting pressure on the bank to keep interest rates low as long as possible despite a weak peso.

In its quarterly inflation report, the Bank of Mexico slashed its growth estimate to between 1.7% and 2.5% from the previous range of 2% to 3%.

If the estimate proves right, it would be a hard blow for President Enrique Peña Nieto. The midpoint of the latest estimate - 2.1% growth - means Latin America’s second-largest economy would expand this year at the same pace as in 2014.

“A low pace of growth is prevailing,” Gov. Agustín Carstens said at the report’s presentation at the bank’s headquarters.

Economic growth in May, the most recent data available, was just 0.1% from April, with industrial production contracting and household consumption recovering marginally.

The Bank of Mexico has kept the overnight interest rate at a record-low 3% since 2014 in an effort to lower borrowing costs and support the sluggish economy.

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