Central bank slashes growth forecast, again

• CUT: For a third time in a row, Mexico’s Central bank cut its GDP growth forecast for 2019 to a range between 0.2% to 0.7% (previous est. was 0.8 to 1.8 percent) citing among other factors: trade tensions, pending USMCA pact ratification, low private investment and weakening demand. 

• QUOTE: “To improve the growth…it’s necessary to improve the efficiency of the economy, greater productivity and higher levels of investment”, said Central bank Governor Alejandro Díaz de León on Wednesday.

• NEXT: Earlier this month, the bank’s board cut its interest rates from 8% to 8.25% and expectation is that a new reduction could happen on September 26th. Yet, Governor Díaz de León opted not to confirm a new cut on interest rates saying all will depend on available data.

• FOCUS: In July, the International Monetary Fund (IMF) reviewed Mexico’s growth outlook down to 0.9% voicing concern about policy reversals on education and energy. An IMF mission will visit Mexico in September where it will focus on a business plan for Pemex, the state-owned oil company.