The Banco de Mexico on Wednesday reduced its economic growth forecast for 2013 to between 2-3 percent, below the 3-4 percent it had predicted originally, bank governor Agustin Carstens announced.
The scaling back of the forecast comes after an economic slowdown in the second quarter, although some strengthening in the country's economic outlook is expected in the second half of 2013.
The behavior of the economy in the first six months of 2013 "makes it practically inevitable that we will have to reduce our economic growth forecast for the country," said Carstens upon the presentation of the inflation report for the April-June period.
In the second quarter, there was considerable volatility in the Mexican markets as a result of sharp movements in international markets that caused a capital outflow, he said.
That, in turn, led to "a significant deceleration in the economy in the second quarter, basically due to the (external economic) environment," the Banco de Mexico chief said.
"Before this quarterly report, we had an expected growth range for 2013 of between 3 and 4 percent and now, with the additional information we've gotten, we're adjusting that range downward to one of between 2 and 3 percent," he said.
The Treasury Secretariat is maintaining its annual economic growth forecast at 3.1 percent, despite the slowdown registered in the first half of this year.
According to preliminary calculations, Mexico's GDP rose by 2.5 percent in the second quarter while in the first quarter it increased by 2.2 percent, in seasonally adjusted figures.
The central bank also adjusted downward its forecast for job growth for 2013, from between 550,000 to 650,000 to "between 450,000 and 550,000" new jobs registered with the IMSS social security institute, Carstens said.
However, the bank director said that the signs of recovery in the U.S. economy are sending a positive signal to Mexico, which has its northern neighbor as its main trading partner.
Given this situation "we certainly expect an upturn in economic growth for the second quarter ... and for that to continue for next year," he said.
"Without a doubt," Mexico's GDP will grow "between 3.2 and 4.2 percent" in 2014, "but we judge that that growth ... continues to be insufficient to create the jobs that the country needs, sustained increases in salaries" and, in general, "to improve the country's well-being," Carstens added.
With regard to general inflation, the forecast is for about 3.5 percent annually at the close of this year and about 3 percent for 2014.
The top Mexican monetary policy official said that it was "indispensable" to move forward on the structural reforms being pushed by the government of President Enrique Peña Nieto, with the ultimate goal of "aspiring to higher growth rates." EFE